OMCs eye expanding LPG buffer to 30 days from national average of 18

Mumbai: State-run oil marketing companies (OMCs) are preparing a nearly 30-day strategic LPG storage plan to bolster energy security after the Iran war exposed India's supply risks through the critical Strait of Hormuz.

Three OMC executives said a major storage expansion proposal is in the works, with Bharat Petroleum set to invest ₹5,000 crore to nearly double LPG capacity to 340,000 metric tonnes (MT) from about 200,000 MT. The LPG expansion plans of IndianOil and Hindustan Petroleum are still on the drawing board.

"The Centre is broadly considering a 30-day LPG inventory requirement, but the methodology to calculate the stockpile is yet to be finalised," said an industry executive. "The key question is whether the buffer should be based on total LPG consumption, total imports, or India's residual supply risk after diversification of sourcing."


OMCs have 214 LPG bottling plants in total across the country with a rated bottling capacity of around 23.04 million metric tonne per annum (MMTPA) as of April.

As per data from the Petroleum Planning and Analysis Cell, LPG tankage at bottling plants is critical to ensure continued operations at a bottling plant in full capacity, especially with respect to northeast India. Tankage at LPG bottling plants in all regions of the country varies from four to seven days' cover, with an all-India figure of five days. LPG tankage at all sources combined varies from eight to 30 days' cover, with an all-India average of 18-day cover.

The storage options are likely to combine expanded onshore storage, underground caverns, and floating storage in Indian waters, while simultaneously diversifying import sources through long-term contracts with suppliers in the US and additional purchases from Europe and Russia. As per the executives, greater diversification of imports could help reduce the amount of storage ultimately needed, helping cut the capital expenditure on new facilities.