LPG Constraints Expose India’s Energy Vulnerabilities, Reform Push Gains Momentum

India’s dependence on imported oil and gas has long been a vulnerability. Nearly 60% of LPG demand is met through imports, with over 90% routed via the Strait of Hormuz. Recent geopolitical tensions have disrupted flows, raising costs and exposing the risks of over-reliance on a single chokepoint.

Energy Security Challenges
The crisis has highlighted India’s limited strategic storage capacity and constrained domestic production. Rising freight costs and war-risk premiums have further strained supply chains, impacting households and industries alike.

Reform Opportunities
Experts suggest that India should leverage this crisis to push for deregulation, encourage private sector participation, and expand renewable energy adoption. Import diversification, investment in strategic reserves, and transparent pricing mechanisms could reduce vulnerability and enhance long-term energy security.

Key Highlights

• 60% of India’s LPG demand met through imports
• 90% of imports routed via Strait of Hormuz
• Supply disruptions raise freight and insurance costs
• Limited strategic storage capacity exposed
• Calls for deregulation and private sector participation
• Push for renewable energy and diversified imports

Sources: Takshashila Institution, ORF, The Hindu