Domestic refiners told to boost LPG output as Hormuz uncertainty lingers

India has instructed refiners to increase liquefied petroleum gas (LPG) production in response to concerns over potential shortages due to the ongoing uncertainty regarding the Strait of Hormuz. This directive comes as the country prepares for the upcoming festival season, which typically sees a surge in LPG demand. The government has mandated private and state-owned refiners, as well as oil and gas producers, to "implement all technically and economically feasible measures" to maximize LPG output.

The government aims to boost domestic LPG production due to the prolonged war, which has led to significant delays in alternative supply routes such as those from the United States and Australia. While domestic refiners had been producing roughly 36,000 tonnes of LPG daily prior to the conflict, they have already increased this output to up to 54,000 tonnes a day to meet heightened demand during the festival season, which starts in September and concludes in November with Diwali.

The government has set specific targets for individual refiners, with Reliance Industries Ltd.'s domestic-market-focused unit being tasked with producing the largest amount at 18,000 tonnes daily. Refiners have also been directed to expand LPG storage, evacuation, and transportation infrastructure. The government will reassess these targets in January and July.

State-owned oil companies Oil and Natural Gas Corp. and Oil India Ltd., along with the national gas pipeline utility Gail India Ltd., have been asked to contribute approximately one-tenth of the total national target.