India’s active domestic LPG customer base has fallen by 6.2 million in five months, reversing more than a decade of expansion and exposing a deeper weakness in the country’s urban energy system: consumption has grown faster than domestic production, while storage capacity remains limited. The contraction followed disruptions to LPG imports against the backdrop of the Iran war, prompting oil marketing companies to halt new connections and tighten checks on existing customers.
Oil ministry data cited in the report showed that active domestic LPG customers declined from 333.9 million at the beginning of April to 327.7 million at the beginning of September. The fall is significant not only because of its size, but because it interrupts a long period in which LPG access expanded steadily across India. At the beginning of 2015-16, the country had 148.6 million active LPG customers. That figure more than doubled to 333.9 million by the start of the current fiscal year.
The expansion was particularly rapid during the four years through 2018-19, when annual customer growth ranged from 11.9% to 19.6%. As the base became larger, growth moderated to around 5% or lower. In the current fiscal year, however, the customer base has contracted by about 1%. That change points to a supply and system-management problem rather than a routine slowing of market expansion.
The immediate pressure came from LPG availability. The Gulf region accounted for around 90% of India’s LPG imports before the war, according to the supplied report. With supplies becoming tighter, oil marketing companies stopped issuing new connections and began using Aadhaar-based biometric verification to identify inactive customers, multiple connections within the same family and households that already had access to piped natural gas, or PNG.
This verification process means the headline decline does not represent one single form of withdrawal. Some connections may have become inactive, some households may have held more than one connection, and some may have shifted to PNG. The report also links the fall to a deliberate effort by oil companies to clean up customer records while limiting new connections during a period of constrained supply. The available figures therefore show the scale of the contraction, but do not establish that every lost LPG connection represents a household that has stopped using LPG altogether.
The government’s PNG push is one part of the transition. City gas distribution companies added nearly 0.6 million PNG customers during the current fiscal year through July, taking the overall number to 17.5 million. Billed PNG customers, a separate measure, increased by 1.06 million to 10.7 million. The report estimates that the move to PNG accounts for roughly one-sixth of the 6.2 million decline in LPG customers.
That proportion is important for understanding the urban dimension of the shift. PNG can replace LPG only where distribution networks have reached neighbourhoods and buildings, and where households are connected and billed. The increase in PNG customers shows that some substitution is taking place, but it also indicates that most of the LPG contraction has another explanation. The supplied data do not establish how the remaining decline is divided between inactive accounts, duplicate connections, supply restrictions and other causes.
The regional pattern is uneven. Southern India recorded the largest fall, with its LPG customer base declining by 2.63 million from the end of March. Western India followed with a reduction of 1.62 million, while northern India saw a decline of 1.5 million. Eastern India recorded a fall of 0.34 million. Despite the contraction, northern India remained the largest regional LPG market at the beginning of September, with 99.3 million customers. Southern India had 79.8 million, western India 68.3 million and eastern India 67.5 million.
These figures matter because household energy transitions are shaped by infrastructure geography. A customer can move from LPG to PNG only when a city gas network is available and the household is able to use it. The regional figures therefore cannot be read simply as a national shift from one fuel to another. They show where the customer base has contracted, but the supplied material does not provide corresponding regional data on PNG connections, household affordability or supply reliability.
The larger pressure is visible in the gap between consumption and production. India’s LPG consumption rose to 31.3 million tonnes in FY25 from 29.7 million tonnes a year earlier. Domestic output, however, remained broadly unchanged at around 12.8 million tonnes. Initial estimates for FY26 put LPG consumption at about 28 million tonnes, while domestic production is expected to be around 10.7 million tonnes.
Even with the lower consumption estimate, the difference between domestic output and national requirements remains substantial. Imports must fill that gap, making LPG one of the more import-reliant parts of India’s energy basket. When a large share of supply comes from a concentrated external region, disruption in shipping, geopolitics or international fuel markets can quickly become a domestic distribution problem.
The customer numbers show how that vulnerability reaches cities and households. LPG is not only an energy commodity moving through ports and refineries; it is a distributed urban utility delivered through cylinders, agencies, transport networks and household connections. A supply shock can therefore affect the ability to add new customers, the frequency and reliability of deliveries, and the administrative scrutiny applied to existing accounts.
Storage is the second structural weakness highlighted by the report. India is estimated to have total LPG storage capacity of around 1.9 million tonnes, equivalent to roughly 22 days of supply. LPG storage is more complicated and costly than crude oil storage because the fuel must be kept in liquid form under pressure. The required infrastructure includes pressurised cylinders, spherical tanks and underground caverns.
The limited buffer changes the consequences of an import disruption. A country with greater storage capacity can hold supplies during a temporary interruption and manage the release of fuel over a longer period. With around 22 days of estimated cover, India’s ability to absorb a prolonged external shock is more constrained. The report attributes the slow expansion of storage to the high cost of facilities, geological limitations and the geographically dispersed nature of LPG distribution.
This is also an institutional coordination challenge. The oil ministry supplies the national policy and data framework; oil marketing companies manage connections, customer verification and distribution; city gas distribution companies expand PNG networks; and households experience the result through the availability and price of cooking fuel. The transition to PNG can reduce pressure on LPG, but only where network investment, connection access and reliable billing systems support it.
The fall in Ujjwala beneficiaries adds another layer to the picture. The number of government scheme beneficiaries for poor households declined by around 0.6 million to 105.7 million, according to the report. The supplied material does not establish how many of these beneficiaries lost access because of supply restrictions, account verification, inactivity or a shift to another fuel. It does, however, show that the decline has reached a programme designed to expand clean cooking access among poorer households.
The evidence confirms three connected trends. LPG adoption expanded rapidly over the past decade; the country remains heavily dependent on imports because domestic production has not kept pace with consumption; and storage capacity has not expanded at the same rate as demand. The current fall in customers is therefore both an immediate response to supply disruption and a measure of the system’s underlying exposure.
The next question is not simply whether LPG connections will rise again. It is whether India’s energy infrastructure can diversify supply sources, build adequate storage and expand PNG networks without creating gaps for households that cannot yet access piped gas. The available data establish the scale of the present contraction and the structural pressures behind it. They do not yet show how long the disruption will last, how many households have permanently changed fuels, or whether storage and domestic production capacity will expand sufficiently to reduce future vulnerability.
