India’s LPG Customer Base Falls By 6.2 Million As Supply Disruptions Hit Imports

India’s active domestic LPG customer base has declined by around 6.2 million households between April and August, marking the first contraction in more than a decade.

According to oil ministry data, the number of active LPG customers fell from 333.9 million at the beginning of April to 327.7 million at the start of September. The decline comes after years of steady expansion in LPG adoption across the country.

The contraction has been linked to tighter LPG supplies following disruptions caused by the West Asia conflict, which affected imports from the Gulf region. Oil marketing companies responded by halting fresh connections and undertaking verification of existing customers.

LPG Customer Base Had More Than Doubled In A Decade

India’s LPG consumer base had expanded substantially over the past decade. Active domestic LPG customers increased from 148.6 million at the beginning of 2015-16 to 333.9 million at the start of the current financial year.

Growth was particularly strong in the years up to 2018-19, when the customer base expanded at rates ranging from 11.9% to 19.6%. Growth subsequently moderated to around 5% or lower as LPG penetration increased.

The latest figures represent a reversal of that long-term trend, with the customer base contracting by roughly 1% during the current financial year.

Gulf Supply Disruptions Put Pressure On LPG Availability

The decline has come amid disruptions to LPG supplies from the Gulf. Before the conflict, the region accounted for around 90% of India’s LPG imports, making the country particularly exposed to interruptions in shipping through the region.

The disruption to LPG supplies prompted oil marketing companies to stop issuing fresh domestic connections, while also reviewing existing accounts.

Industry executives cited Aadhaar-based biometric verification as one of the measures being used to identify inactive consumers, multiple connections within the same family and households that already have access to piped natural gas (PNG).

India’s LPG supply situation had already come under pressure earlier this year after disruptions around the Strait of Hormuz affected shipments from West Asia.

Ujjwala Customer Base Also Declines

The contraction has also affected the Pradhan Mantri Ujjwala Yojana, which provides LPG connections to eligible low-income households.

The number of active Ujjwala beneficiaries declined by approximately 600,000, falling to around 105.7 million at the beginning of September.

The decline comes despite the scheme’s role in expanding access to LPG among households that previously relied on traditional cooking fuels.

Push Towards Piped Natural Gas

Another factor behind the reduction in LPG customers is the government’s push to encourage households with access to piped natural gas to switch from LPG.

City gas distribution companies added nearly 600,000 PNG customers until July this financial year, taking the overall PNG customer base to around 17.5 million.

However, the shift to PNG accounts for only about one-sixth of the 6.2 million LPG customers lost during the April-August period.

The government has been encouraging eligible households located in areas with PNG infrastructure to make the transition to piped gas.

Southern India Records Largest Decline

Southern India recorded the largest fall in LPG customers during the period, losing approximately 2.63 million households since the end of March.

Western India followed with a decline of around 1.62 million customers, while northern India saw its LPG customer base fall by approximately 1.5 million.

Eastern India recorded a comparatively smaller decline of around 340,000 customers.

Despite the reduction, northern India continued to have the country's largest LPG customer base at the beginning of September, with around 99.3 million customers. Southern India had approximately 79.8 million, followed by western India with 68.3 million and eastern India with 67.5 million.

The latest figures indicate a significant pause in India’s decade-long expansion of LPG access, with supply constraints, customer verification and the gradual shift towards PNG reshaping the domestic cooking-fuel market.

ABOUT THE AUTHOR

Susmita Modak

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Always love to raise the unraised matter. In a world of worries, I am always ready to come over my comfort zone and taking the step ahead of spreading awareness.

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