LPG consumption and imports in India set to grow

23 January 2018 Authored by Consultancy.in

As a result of targeted government initiatives to provide LPG in rural India, consumption of the gas is set to increase by nearly 6% to 23 million tonnes by the end of this year, according to estimates by Hemal Sanghani, CEO of an Indian consulting firm. 

As India's economy expands into a regional and global powerhouse, government initiatives to ensure equitable growth within the country have become all the more important. While promising signs exist in the form of the spread of digital access to rural areas, necessary commodities such as LPG for cooking are still lacking in many regions across the country. 

Currently, 18% of the Indian population uses LPG. Moreover, LPG comprises 82% of the cooking fuel in urban areas, compared to only 30% in rural areas; a situation that the Government of India (GOI) has attempted to rectify through the Pradhan Mantri Wjjwala Yojana (PMWY). The scheme aims to bring LPG access to as many as 50 million households by 2019, with a strong preference for rural households that fall below the poverty line.

LPG consumption and imports in India set to grow

Hemal Sanghani suggests that LPG consumption will, consequently, skyrocket over the next year. As per his firm's estimates, consumption will increase by 6% to 23 million tonnes by next year, more than half of which will be fed by imports. Specifically, imports will account for 12 million tonnes this year, as compared to 10.9 million at the end of last year.

A majority of this volume will come from Saudi Arabia, Qatar, and other middle-eastern countries, which supply 90% of India's regular LPG imports, while between 50,000 and 100,000 tonnes are supplied on average by the US per quarter.

In order to cope with the increased flow, GOI has earmarked a sum of $4.5 billion to fund the expansion of terminals, the construction of storage units and bottling plants, and the laying of new pipelines. Among the constructions plans is an import terminal on the west coast with an annual capacity of 2 million tonnes, and a 60,000 tonne storage unit in south India, executed by Total in collaboration with Hindustan Petroleum.

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