India looks to turn LPG import crisis into push for piped gas

By Nidhi Verma

NEW DELHI, April 2 (Reuters) - India is using a cooking gas crisis triggered by the Iran war to plug leaks in its local distribution chain and strengthen infrastructure to expedite a shift towards piped gas as it looks to reduce liquefied petroleum gas imports and spending on subsidies.

The government has invoked emergency powers to ensure that limited LPG supplies are directed toward actual household use and will halt supplies after three months for customers linked to piped gas connections.

Last month, India issued an order setting timelines for new pipeline approvals, with permissions deemed granted if authorities fail to respond in time, while requiring landowners and local authorities to allow pipeline access.

"Witness rapid expansion of CGD (city gas distribution) network across the country ... a crisis turned into an opportunity", said Neeraj Mittal, the secretary of the Ministry of Petroleum and Natural Gas, on social media.

In March, India added 580,000 new households to its piped gas supply network, the government said on Tuesday, compared with 342,300 a year earlier.

India is the world's No. 2 importer of LPG, meeting about 60% of its needs with overseas purchases. It shipped in about 22 million metric tons of LPG in 2025, mostly from the Middle East, spending nearly $12 billion.

LPG DISRUPTION EXPOSES IMPORT DEPENDENCE

The world's most populous country has been hit hard by LPG supply disruptions, exposing vulnerabilities in its import-dependent energy system and prompting officials to take steps to manage supply and demand.

India's LPG imports could decline by about 10% to 15% by 2030 due to the measures, including the expansion of piped gas, said Prashant Vashist of credit-rating agency ICRA.

India satisfies half of its natural gas consumption with imports of liquefied natural gas.

"This (shift to natural gas) would cut the companies' revenue losses on the sale of domestic LPG and would also reduce the subsidy burden," he said.

Shifting consumers to piped gas, which is sold closer to market rates, would help contain fiscal pressures while improving supply efficiency.

Retailers sell LPG to commercial users at market prices, while selling cooking fuel to households at subsidised rates that are about 56% cheaper. Last year, a limited compensation to retailers cost the government $3.4 billion.

Since the start of the war, suppliers including Indraprastha Gas IGAS.NS, Mahanagar Gas MGAS.NS, GAIL Gas and Bharat Petroleum Corp BPCL.NS have offered incentives such as reductions in installation charges for piped gas connections.

India has 333.7 million household LPG customers including 106 million low-income families receiving subsidised gas.

Local gas suppliers have been connecting about 2 million to 2.5 million consumers annually, bringing the total to 16.3 million at the end of December.

The recent policy changes should raise that pace to about 7.5 million connections annually, said Gajendra Singh, former member of the Petroleum and Natural Gas Regulatory Board, bringing the national total to 35 million to 40 million by 2030.

"This expansion would cut LPG imports and offer a safer, more convenient alternative for households," he said.

(Reporting by Nidhi Verma; Editing by Tony Munroe and Thomas Derpinghaus)

((nidhi.verma@thomsonreuters.com; X: @nidhi712;))