Article 3: Energy Security & LPG Demand
Why in News: India’s dependence on Liquefied Petroleum Gas (LPG) imports has increased significantly, with nearly 60% of the country’s LPG demand now met through imports.
Key Details
- India’s LPG imports have increased 12 times between 1998-99 and 2024-25, reflecting growing domestic demand.
- LPG import expenditure has risen sharply from ₹1,274 crore to about ₹1.06 lakh crore during the same period.
- Government schemes like Pradhan Mantri Ujjwala Yojana (PMUY) and rising urbanisation have significantly boosted LPG consumption.
- Domestic LPG production has stagnated since 2017-18, creating a widening gap between demand and supply.
Liquefied Petroleum Gas (LPG): Nature and Importance
- Definition and Composition: LPG is a mixture of propane and butane gases, produced mainly as a by-product of crude oil refining and natural gas processing. It is widely used as a cooking fuel due to its high calorific value and clean combustion.
- Role in Household Energy: LPG has become the primary cooking fuel for millions of households, replacing traditional fuels such as firewood and cow dung. This transition has improved energy efficiency and indoor air quality.
- Clean Energy Advantage: Compared to biomass fuels, LPG produces significantly lower particulate matter and carbon emissions, contributing to improved public health and environmental sustainability.
- Strategic Importance: As a widely used household fuel, LPG plays a key role in energy access, social welfare, and economic development, especially in rural and semi-urban areas.
Rising LPG Imports in India
- Sharp Increase in Import Volume: LPG imports increased from 1,722 thousand metric tonnes (TMT) in 1998-99 to 20,667 TMT in 2024-25, representing nearly a 12-fold growth over 27 years.
- High Import Dependence: India currently imports about 60% of its LPG requirements, indicating growing dependence on international markets for domestic energy needs.
- Increasing Import Expenditure: LPG import costs have increased dramatically from ₹1,274 crore in 1998-99 to approximately ₹1.06 lakh crore in 2024-25, reflecting both higher demand and global energy price fluctuations.
- Dominant Share in Petroleum Imports: LPG now accounts for around 53% of total petroleum product import expenditure, making it the most imported petroleum product in India.
Drivers of Growing LPG Demand
- Rapid Urbanisation: Urbanisation has led to changing lifestyles and increased preference for modern cooking fuels. Urban households typically rely on LPG due to convenience, efficiency, and reliability.
- Expansion of Middle-Class Households: Rising incomes and improved living standards have increased the adoption of LPG among the expanding middle class.
- Government Welfare Schemes: Programs such as the Pradhan Mantri Ujjwala Yojana (PMUY) have played a major role in expanding LPG access to poor households by providing free connections and subsidies.
- Transition from Traditional Fuels: Rural households previously depended on biomass fuels like firewood and animal dung, but welfare schemes and awareness campaigns have accelerated the shift toward cleaner LPG fuel.
Role of Government Schemes in Expanding LPG Use
- Pradhan Mantri Ujjwala Yojana (PMUY): Launched in 2016, the scheme provides free LPG connections to women from poor households, aiming to improve health outcomes and reduce indoor air pollution.
- Rural Energy Access: By 2024, about 10.56 crore PMUY connections had been distributed, with nearly 80% of beneficiaries belonging to rural households.
- Consumption Growth Impact: Following the launch of PMUY in 2016-17, LPG consumption witnessed a growth spike of 10.1%, highlighting the strong influence of welfare schemes.
- Social and Gender Impact: LPG access reduces drudgery for women and improves health conditions by reducing exposure to smoke from traditional fuels.
Demand–Supply Gap in LPG
- Rapid Consumption Growth: LPG consumption increased from 5,352 TMT in 1998-99 to 29,664 TMT in 2023-24, reflecting a more than fivefold rise.
- Limited Growth in Production: Domestic LPG production increased from 3,599 TMT to 12,779 TMT during the same period, indicating slower production growth compared to demand.
- Widening Supply Deficit: The supply gap widened dramatically from 1,753 TMT in 1998-99 to about 16,885 TMT in 2023-24, making imports essential.
- Production Plateau: Domestic LPG production has largely stagnated at around 13,000 TMT per year since 2017-18, indicating structural constraints in production capacity.
Energy Security Concerns
- Dependence on Global Supply Routes: Nearly 90% of India’s LPG imports pass through the Strait of Hormuz, one of the world’s most important energy chokepoints.
- Geopolitical Risks: Political instability in the Middle East or disruptions in maritime trade could significantly affect India’s LPG supply.
- Price Volatility: International energy price fluctuations directly impact India’s import bill and subsidy burden.
- Strategic Vulnerability: High import dependence increases risks for India’s energy security and macroeconomic stability.
Environmental and Developmental Dimensions
- Cleaner Fuel Transition: LPG adoption contributes to the transition toward cleaner household energy, supporting climate and sustainability goals.
- Health Benefits: Reduced reliance on biomass fuels lowers indoor air pollution, which is responsible for millions of respiratory illnesses annually.
- Sustainable Development Goals (SDGs): LPG expansion supports SDG-7 (Affordable and Clean Energy) and SDG-3 (Good Health and Well-being).
- Energy Equity: Access to LPG improves quality of life in rural and marginalized communities.
Conclusion
India’s growing LPG consumption reflects progress in clean energy access and socio-economic development, but rising import dependence poses challenges to energy security. Strengthening domestic production, diversifying energy sources, promoting alternative clean cooking fuels, and improving energy efficiency are essential for achieving a balanced and sustainable household energy system.
EXPECTED QUESTION FOR UPSC CSE
Prelims MCQ
Q. Consider the following statements regarding LPG in India:
- LPG is mainly produced as a by-product of crude oil refining and natural gas processing.
- India is currently a net exporter of LPG.
- Pradhan Mantri Ujjwala Yojana aims to increase access to LPG among poor households.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer: (b)