The government is evaluating plans to create a 30-day strategic reserve for liquefied petroleum gas (LPG) following supply disruptions triggered by the ongoing crisis in West Asia. The move reflects a growing recognition that large-scale LPG storage infrastructure is essential for energy security, especially for a country heavily dependent on imports for its cooking fuel requirements. Officials from the Ministry of Petroleum and Natural Gas (MoPNG) and state-run oil marketing companies (OMCs) are actively discussing the development of additional underground storage caverns for LPG. These facilities would function as strategic reserves capable of stabilising supplies during global disruptions.
Plans to Expand Underground LPG Storage Caverns
Currently, India operates two LPG storage caverns with a combined capacity of about 1.4 lakh tons, which can meet roughly 1.5 days of the country’s demand. India consumes approximately 80,000 tons of LPG per day, making additional storage capacity increasingly critical. According to industry sources, OMCs have already begun identifying potential locations for new underground caverns. These facilities would be developed along the lines of existing storage sites in Mangalore and Visakhapatnam.
Oil marketing companies have been working for some time on plans to build additional LPG storage caverns. However, the present geopolitical tensions and disruptions to imports have accelerated the process. The companies are now actively evaluating potential sites as part of a medium-to-long-term strategy. The proposal has also reportedly been reviewed at the Prime Minister’s Office (PMO), underscoring the government’s priority to strengthen strategic storage for both crude oil and LPG.
Existing LPG Caverns in India
India currently has two major underground LPG storage facilities that play a critical role in the country’s energy infrastructure.
Mangalore: State-owned Hindustan Petroleum Corporation Limited (HPCL) operates an
80,000-ton underground LPG rock cavern.
Visakhapatnam: South Asia LPG Company Pvt. Ltd., a joint venture between HPCL and TotalEnergies Marketing Holdings India, runs a 60,000-ton cavern.
These facilities store LPG safely underground and serve as key supply buffers for India’s rapidly growing LPG consumption.
Strategic Importance of LPG Storage
LPG remains the primary cooking fuel for more than 33 crore consumers in India, making uninterrupted supply a national priority. However, the country still relies heavily on imports to meet domestic demand. In FY2025, India consumed over 33 million tonnes (mt) of LPG, of which around 20.67 mt was imported. Nearly 90% of these imports originate from West Asia, with shipments passing through the Strait of Hormuz (SoH)—a region highly vulnerable to geopolitical tensions. Given this dependency, policymakers increasingly view strategic LPG storage as a critical safeguard against supply shocks.
Lessons from Global Energy Storage Practices
Several energy-importing nations have already developed large strategic reserves for hydrocarbons to ensure supply stability during crises. For instance: Japan maintains strategic and commercial reserves of crude oil, LNG, and LPG equivalent to around 250 days of consumption, South Korea holds storage capacity of nearly 200 days, including 50–60 days of LPG reserves. Globally, more than 80 LPG storage caverns are currently operational. Underground caverns are considered among the safest and most efficient methods of storing LPG, which is typically stored as a pressurised propane-butane mixture requiring specialised high-pressure or cryogenic storage facilities.
Strategic Push Amid Geopolitical Uncertainty
Government officials say the current geopolitical tensions have accelerated efforts to expand India’s strategic fuel reserves. “The ongoing crisis has made it clear that large energy-consuming nations must build sufficient storage capacity. Strategic reserves not only ensure energy security but also provide greater autonomy in dealing with supply disruptions or geopolitical pressures,” a senior official noted. The government is now prioritising long-term investments in LPG and crude oil storage infrastructure to reduce vulnerability to external shocks.
Strengthening India’s Energy Security
As India’s LPG consumption continues to rise, the creation of a 30-day strategic LPG reserve could significantly strengthen the country’s energy resilience and supply stability. As reported by thehindubusinessline.com, by expanding underground storage infrastructure and diversifying strategic reserves, India aims to shield domestic consumers from global supply disruptions while reinforcing its long-term energy security framework.
