Government Sets Refinery-Wise LPG Production Targets to Strengthen Domestic Fuel Supply
In an initiative to build an enduring safety net against international supply shocks, the Ministry of Petroleum and Natural Gas has established facility-specific liquefied petroleum gas (LPG) output targets for 21 public and private refineries and upstream energy producers across India.
What Happened
The petroleum ministry issued a directive establishing maximum daily production benchmarks for domestic refineries and natural gas processors, applicable whenever the country faces an LPG shortage or supply disruption. Under this directive, selected facilities across public sector undertakings and private companies can be required to produce up to 63,810 tonnes of LPG per day. This overall capacity represents more than double India’s domestic daily production rate recorded in 2025-26 and covers roughly 70 percent of daily national consumption.
Among individual producers, Reliance Industries’ 33-million-tonne-per-annum domestic-tariff area (DTA) refinery in Jamnagar, Gujarat, received the single largest allocation of up to 18,000 tonnes per day. No target was allocated to Reliance’s export-only refinery at the same location. Nayara Energy’s Vadinar refinery was assigned an output target of 4,480 tonnes daily, while 18 public-sector refineries were given a collective target of 31,470 tonnes per day. Upstream gas processors, including ONGC and GAIL, received a combined production target of 6,460 tonnes per day.
Key Highlights
- Total Contingency Capacity: 21 operational refineries and upstream facilities are designated to supply up to 63,810 tonnes of LPG daily during crises.
- Largest Allocation: Reliance Industries’ domestic Jamnagar facility accounts for the highest single quota at up to 18,000 tonnes per day.
- Public Sector Share: 18 state-owned refineries have been assigned a combined target of 31,470 tonnes per day.
- Upstream Production: Gas processors ONGC and GAIL are assigned a joint target of 6,460 tonnes per day.
- Infrastructure Mandates: Energy firms must maintain adequate storage, transport, and evacuation facilities via rail and road tankers to handle the designated volumes.
- Technical Upgrades: Facilities are required to adopt feasible technical measures, such as naphtha-to-LPG conversion and catalytic cracker modifications, to boost yields.
- Biannual Review: The government will update the refinery production schedule every six months, specifically on January 1 and July 1.
Why This Matters
The policy moves India away from ad-hoc crisis management toward a structured domestic contingency mechanism. During 2025-26, India consumed approximately 33.2 million tonnes of LPG (about 91,000 tonnes daily), but produced only 13.1 million tonnes locally (about 35,900 tonnes daily). The shortfall required importing 21.3 million tonnes, leaving the nation reliant on foreign sources for more than 64 percent of its LPG needs.
This reliance exposed significant vulnerabilities when geopolitical conflict involving Iran disrupted transit through the Strait of Hormuz, a maritime route responsible for delivering 90 percent of India’s imports from suppliers like Saudi Arabia. While emergency measures in March pushed domestic production to roughly 55,000 tonnes per day by diverting petrochemical streams and curbing non-household sales, the new framework formalises operational readiness without requiring improvised intervention.
What to Watch Next
Refineries and upstream companies must maintain logistical infrastructure, including storage capacity and evacuation systems via rail and road, to meet the specified targets when called upon. Any technical upgrades undertaken to increase yields must be reported to the Centre for High Technology or designated regulatory bodies. The first scheduled formal revisions to the target schedule will occur on January 1 and July 1, reflecting new facilities or enhanced processing capacities.
Frequently Asked Questions
When do these refinery output quotas take effect?
The established production levels are designed to be enforced whenever India experiences a domestic LPG shortfall or an import supply disruption.
Why was Reliance Industries assigned the largest quota?
Reliance’s domestic-tariff area refinery at Jamnagar possesses substantial refining scale and has been directed to deliver up to 18,000 tonnes daily to serve the Indian market. Its export-dedicated unit received no domestic quota.
How frequently will the government review the production allocations?
The Ministry of Petroleum and Natural Gas will revise and update the schedule twice annually, on January 1 and July 1, accounting for technological upgrades and new refining infrastructure.
Source: Times of India