India is facing pressure in LPG supply due to disruptions around the Strait of Hormuz, a key global shipping route. However, despite these geopolitical tensions, the country is not experiencing shortages of petrol or diesel.
At first glance, this may seem puzzling. All these fuels originate from crude oil, so why is only LPG affected?
The answer lies in how these fuels are produced, imported, stored and distributed in India’s energy system. Petrol and diesel are largely produced domestically through India’s large refining network. LPG, on the other hand, depends much more on direct imports and has a relatively small storage buffer. Because of these structural differences, LPG supply becomes more vulnerable when global shipping routes face disruptions.
Why Petrol and Diesel Supply Remains Stable
Petrol and diesel supply remains stable in India because of the country’s strong refining infrastructure.
India operates 23 crude oil refineries with a total refining capacity of about 248–256 million tonnes per year. These refineries process over 220 million tonnes of crude oil annually, converting imported crude into fuels such as petrol, diesel and aviation fuel within the country.
Another important factor is diversification of crude oil sources. India imports crude from multiple regions rather than relying on a single supplier. This reduces the risk of supply disruptions affecting fuel availability across the country.
Additionally, crude oil inventories and refinery storage provide a buffer. Even if shipments are temporarily disrupted, refineries can continue processing stored crude oil and keep petrol pumps supplied.
Because petrol and diesel are produced domestically from imported crude oil, their supply chain is more resilient during global disruptions.