India Mulls Creating 30-Day LPG Strategic Reserve

Why It Matters

A 30‑day LPG reserve would blunt import volatility and safeguard cooking fuel for over 330 million Indians, reinforcing national energy resilience.

Key Takeaways

• India aims for 30‑day LPG reserve, 2.4 Mt capacity.
• Existing caverns hold only 1.5 days of demand.
• LPG imports cover 60% of consumption, vulnerable to crises.
• Strategic storage aligns with Japan, South Korea models.
• Government prioritizes energy security amid West Asia conflict.

Pulse Analysis

India’s reliance on imported liquefied petroleum gas has long been a hidden vulnerability in its energy mix. Consuming roughly 80,000 tonnes per day, the nation imports about 60 percent of that volume, primarily from West‑Asian producers. The recent escalation of geopolitical tensions in the region exposed the fragility of this supply chain, prompting policymakers to reconsider the adequacy of existing storage. While the two underground caverns in Mangalore and Visakhapatnam collectively hold 140,000 tonnes—enough for just 1.5 days of demand—the proposed 30‑day reserve would require a dramatic scale‑up to roughly 2.4 million tonnes, fundamentally reshaping India’s strategic fuel posture.

Strategic petroleum reserves are a well‑established tool among energy‑importing economies. Japan and South Korea, for instance, maintain 50‑60 days of LPG storage, part of broader buffers that total over 200 days for various hydrocarbons. By mirroring these models, India can achieve multiple objectives: cushioning households from price spikes, ensuring uninterrupted cooking fuel for 33 crore consumers, and reducing the leverage that exporting nations hold during crises. Moreover, underground rock caverns offer a cost‑effective, low‑risk solution compared with high‑pressure or cryogenic tanks, aligning with global best practices for LPG safety and longevity.

Implementing a 30‑day reserve, however, poses logistical and regulatory challenges. Identifying suitable geological formations, securing investment from state‑run and private oil‑marketing companies, and streamlining permitting processes will be critical. The initiative also raises questions about market dynamics; a sizable domestic buffer could dampen import demand, potentially reshaping price signals and contract structures. Yet, the strategic upside—enhanced energy autonomy, reduced exposure to geopolitical shocks, and a more resilient supply chain—makes the endeavor a compelling priority for India’s energy ministry and the Prime Minister’s Office.