According to oil ministry data, the number of active domestic LPG customers fell from 333.9 million at the beginning of April to 327.7 million at the beginning of September. The decline has occurred against the backdrop of the Iran war, which affected LPG availability from the Gulf region. Before the conflict, the region accounted for around 90 per cent of India’s LPG imports.

The contraction followed measures by oil marketing companies to restrict new LPG connections and tighten verification of existing customers. Industry executives said Aadhaar-based biometric verification was being used to identify inactive customers, multiple connections within the same family, and households that already had access to piped natural gas (PNG).

LPG Customer Base Contracts

The decline reverses years of steady growth in LPG adoption. India had 148.6 million active LPG customers at the beginning of 2015-16, with the number more than doubling to 333.9 million by the beginning of the current fiscal year.

Growth in the LPG customer base was particularly strong between 2015-16 and 2018-19, when annual growth ranged from 11.9 per cent to 19.6 per cent. As the customer base expanded, growth moderated to around 5 per cent or lower. In the current fiscal year, the customer base has instead contracted by around 1 per cent.

The number of beneficiaries under the government’s Ujjwala scheme also declined by around 0.6 million to 105.7 million during the period.

Shift Towards PNG

The government has simultaneously encouraged households in areas with PNG infrastructure to shift from LPG to natural gas.

City gas distribution companies added nearly 0.6 million PNG customers through July, taking the overall customer base to 17.5 million. Billed PNG customers increased by 1.06 million to 10.7 million.

The shift to PNG accounts for roughly one-sixth of the 6.2 million decline in LPG customers.

Southern India recorded the largest regional decline, with its LPG customer base falling by 2.63 million from the end of March. Western India followed with a decline of 1.62 million, while northern India recorded a reduction of 1.5 million. Eastern India saw a decline of 0.34 million.

Despite the contraction, northern India continued to have the largest LPG customer base at the beginning of September, with 99.3 million customers, followed by southern India at 79.8 million, western India at 68.3 million and eastern India at 67.5 million.

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Rising Import Dependence

India’s LPG consumption has continued to remain substantially higher than domestic production. LPG consumption stood at 31.3 million tonnes in FY25, compared with 29.7 million tonnes a year earlier, while domestic output remained broadly unchanged at around 12.8 million tonnes.

Initial estimates for FY26 put LPG consumption at around 28 million tonnes, against expected domestic production of approximately 10.7 million tonnes. The gap between consumption and domestic output increases India’s dependence on imports to meet its LPG requirements.

The supply disruption has also highlighted constraints in India’s LPG storage infrastructure. The country is estimated to have around 1.9 million tonnes of LPG storage capacity, equivalent to roughly 22 days of supply.

Unlike crude oil, LPG requires specialised storage facilities because it must be maintained in liquid form under pressure. The expansion of storage capacity has faced challenges related to construction costs, geological constraints and the geographically dispersed nature of LPG distribution.