India’s LPG shortfall spurs push for storage growth, supply diversification in Oil & Companies News 17/04/2026 India is accelerating plans to build strategic LPG storage and expand its stockholding strategy beyond crude oil, as the war in the Middle East highlights supply vulnerabilities in a market reliant on the region for imports, government, industry sources and analysts said April 16. Although opportunities to increase domestic LPG production in the near term remain limited, and importing large volumes from distant suppliers such as the US incurs higher costs, constructing both underground and above-ground storage facilities may offer a more practical solution and help cushion supply fluctuations amid rising geopolitical turbulence, while strengthening energy security, according to the sources. “Holding plentiful LPG inventories is now a priority, and it is a no-brainer now that the government has started looking at options to expand storage,” said a senior petroleum ministry official on April 16. India has above-ground and underground storage for LPG, owned by oil marketing and refining companies. Given the push for LPG as a clean cooking fuel, especially in rural households and lower-income groups, LPG consumption has risen considerably, though this has been partly offset by the use of piped natural gas in urban areas, Mukesh Kumar Surana, former chairman and managing director of state-run Hindustan Petroleum Corp. Ltd., told Platts, part of S&P Global Energy. “It may be worthwhile to consider strategic LPG cavern storage of some capacity to provide cushion to future supply shocks,” Surana said. India’s underground storage capacity is limited to two caverns. In 2025, Hindustan Petroleum Corp. Ltd. commissioned its 80,000-metric-ton underground LPG rock cavern in Mangalore, raising the country’s total underground cavern LPG storage capacity to about 140,000 mt. The other operational cavern, with a capacity of 60,000 mt, is operated by South Asia LPG Co. Pvt. Ltd. Combined with above-ground storage, these facilities provide roughly 22 days of supply cover. India could add about 410,000 mt of overall LPG storage capacity over the next two to three years to bolster strategic reserves and safeguard against market disruptions, according to S&P Global Energy CERA. The Indian government could establish an LPG reserve sufficient to cover 30 days of national consumption, said Ravi Sharma, analyst for NGLs at CERA. This proactive approach could involve developing additional underground storage caverns, representing a significant step toward enhancing energy security, Sharma said. “While no specific timelines, new locations or precise capacity targets have been publicly disclosed, the planning and evaluation process is underway, with oil marketing companies identifying potential sites and conducting feasibility studies,” Sharma said. “This indicates an encouraging shift from planning to tangible action.” Supply diversification India relies on the Gulf region for about 60% of its LPG consumption. The Middle East conflict has triggered urgent government intervention to secure alternative supplies and encourage the use of kerosene and coal in restaurants and other lower-priority sectors to alleviate supply pressures. Analysts note that if the war continues, India may have to rely more on long-haul spot cargoes, which could lead to higher freight costs and affect domestic prices. India consumed 33.2 million mt of LPG in the fiscal year 2025-26 (