New Delhi, September 4 (TNA) India’s domestic liquefied petroleum gas (LPG) consumption has dropped sharply by about 16 per cent in the April–August 2026 period, prompting the government to accelerate a major policy push towards piped natural gas (PNG) and tighten rules around subsidised cooking-gas cylinders.
According to data from the Petroleum Planning and Analysis Cell (PPAC) under the oil ministry, LPG use fell to 11.3 million tonnes in these five months from 13.4 million tonnes a year earlier, as supply disruptions linked to the West Asia conflict and a deliberate policy shift away from cylinders towards PNG connections began to bite.
Why LPG use is falling
The decline in LPG demand reflects both external shocks and domestic policy choices. On one hand, the ongoing conflict in West Asia has disrupted global LPG supplies and raised import costs for India, which relies heavily on overseas shipments to meet its cooking-gas needs. On the other hand, the Centre has been actively encouraging households, especially in cities with existing gas networks, to switch from cylinder-based LPG to PNG, which is seen as cheaper, cleaner and less subsidy-intensive in the long run.
In August alone, LPG consumption slid 16.1 per cent year-on-year to 2.42 million tonnes, while petrol and diesel demand rose 6.4 per cent and 4.3 per cent respectively, indicating that the drop is concentrated in the cooking-fuel segment rather than a broader slowdown in energy use.
Government’s “big change” on gas cylinders
Against this backdrop, the government has moved to restructure how subsidised LPG cylinders are accessed and distributed. From September 1, 2026, multiple changes have come into force for domestic and commercial LPG consumers, including:
• Mandatory Aadhaar-based e-KYC: Households were required to complete e-KYC for their LPG connections by August 31. Consumers who missed the deadline risk losing access to subsidised rates and may face disruptions in refills; PMUY (Ujjwala) beneficiaries could also see their direct benefit transfers paused until compliance.
• Price revisions: Oil marketing companies have revised LPG prices from September 1, with commercial cylinders seeing a noticeable hike, while domestic cylinder rates are being adjusted in line with international benchmarks and subsidy calculations.
• Push for PNG migration: A new incentive scheme for city gas distribution companies, effective September 1, rewards them with additional allocations of lower-priced domestically produced gas for every new billed household PNG connection above a prescribed threshold in their area. The petroleum ministry has also asked states and Union Territories to appoint nodal officers to coordinate with gas distributors and oil marketing companies to speed up the shift from LPG to PNG at the district level.
Together, these measures signal a clear policy intent: reduce dependence on imported LPG cylinders, contain the mounting subsidy burden and expand PNG coverage in urban and semi-urban areas where pipeline infrastructure already exists.
Impact on households and oil companies
For consumers, the immediate implication is that those who have not completed e-KYC may find their subsidised LPG refills blocked or delayed, and could end up paying higher, non-subsidised prices until compliance is achieved. At the same time, households in PNG-enabled localities are being nudged to switch to piped gas, which offers continuous supply and typically lower per-unit cooking costs but requires upfront connection charges and fixed infrastructure.
For oil marketing companies, the 16 per cent drop in LPG volumes, combined with elevated crude and import prices, is squeezing margins in the domestic LPG business, even as petrol and diesel sales remain robust. Analysts say better-targeted LPG subsidies and faster PNG rollout could help ease fiscal pressure, but also warn that poorly managed transitions could hurt low-income families still dependent on cylinders.
As the government doubles down on its PNG push and enforces stricter cylinder rules, the sharp fall in LPG consumption is likely to be the beginning of a structural shift in how India cooks, rather than just a temporary dip driven by supply shocks.