India’s refined petroleum product (POL) imports during 2024 rose to record levels spurred by higher purchases of liquefied petroleum gas (LPG) as the world’s third largest energy consumer pushes clean cooking initiatives, particularly targeting low income households.

According to OPEC’s February 2025 oil market report, India’s product imports recorded fresh record highs in 2024, averaging 1.2 million barrels per day (mb/d).

“For the year, India’s product imports averaged 1.2 mb/d, a gain of 85,000 b/d, or 8 per cent, over 2023. LPG inflows contributed the most to the increase, up 71,000 b/d, or 12 per cent, boosted by clean cooking programmes targeted to support low-income families.,” it added.

Imports

India’s LPG imports rose 10.30 per cent Y-o-Y to 1.82 million tonnes (mt) in January 2025. However, it fell by 2.2 per cent on a monthly basis, as per the Petroleum Planning & Analysis Cell (PAC)

During April-January in FY25, the in-bound cargoes rose by 15.1 per cent Y-o-Y to 17.47 mt on a provisional basis.

In fact, LPG imports during Q3 FY25 are among the all time high numbers for the December quarter. Cargoes rose by 11.52 per cent Y-o-Y to 5.81 mt. Compared with Q3 FY23, the imports were higher by 18.10 per cent. October 2024 shipments almost touched 2 mt (1.985 mt).

POL products imports increased by 8.2 per cent Y-o-Y during April-January FY25 to 43.08 mt mainly due to increase in imports of petcoke and LPG, etc, PPAC said.

Imports made due to deficit in production viz. LPG and Lubes/ LOBS accounted for 46.2 per cent share of total POL products import during 10M FY25 compared to 43.2 per cent a year-ago. Share of LPG alone was 40.5 per cent, it added.

LPG production stood at 1.18 mt in January 2025.

Low income households

As of December 2024, the PMUY scheme (Ujjwala 1.0, 2.0 and extended) covers around 10.33 crore beneficiaries, since its launch in May 2016. As of December 2024, a total of 75.1 lakhs connections have been issued under Pradhan Mantri Ujjwala Yojana (PMUY-II extended scheme).

The highest percentage of PMUY connections since inception of the scheme in May 2016 have been in the Eastern region at 32.4 per cent. It is followed by Northern region (29.7 per cent), Western region (21.5 per cent), Southern region (10.5 per cent) and North-east region (6.0 per cent).

Southern region dominates in coverage of beneficiaries under State sponsored schemes with around 1.16 crore customers covered mainly in Andhra Pradesh, Tamil Nadu, and Telangana, PPAC said.

Only 1.081 crore PMUY connections have been issued as of December 2024 in Southern region, presumably because a large number of BPL families were already covered through State sponsored schemes, it added.

Boost to clean cooking

As of December 2024, state-controlled oil marketing companies (OMCs) cumulatively had 32.89 crore active domestic LPG customers, served through 25,542 distributors.

OMC’s active domestic customers increased at a CAGR of around 8.5 per cent during April 2015 to December 2024. OMC’s LPG distributors increased at a CAGR of around 6.3 per cent during April to 2008 to December 2024.

Around 33.3 lakh new domestic customers were enrolled during April-December in FY25. PSU OMCs sold nearly 23.1 mt of LPG, of which about 88.7 per cent was in the domestic sector. During the said period, OMCs recorded a growth of 6.1 per cent Y-o-Y in total sales.

Northern region accounted for the highest consumption of LPG (31 per cent) followed by Southern (27 per cent), Western (22 per cent), Eastern (17 per cent) and North-eastern region (3 per cent).

PSU OMCs have a total of 212 LPG bottling plants all over India with rated bottling capacity of around 23.02 MTPA (million tonne per annum).

LPG under recovery

Motilal Oswal Financial Services in a recent commentary discussed the session on February 13 led by Oil Minister H S Puri and Oil Secretary Pankaj Jain during the India Energy Week (IEW) 2025.

The Ministry of Petroleum & Natural Gas (MoPNG) has said that LPG is a regulated commodity. However, it “remains optimistic” about OMCs receiving compensation to cover LPG under-recovery related losses in FY25 till date (TD).

Motilal Oswal Financial Services in a recent commentary on LPG said that this was a key concern for OMCs during 9M FY25, is the combined under-recovery amounting to ₹29,160 crore.

Of this, the share of Indian Oil Corporation (IoCL) is ₹14,330 crore, Bharat Petroleum Corporation (BPCL) stands at ₹7,230 crore and Hindustan Petroleum Corporations (HPCL) ₹76,000 crore.

With propane prices averaging $630 per tonne in Q4 FY25 (similar to Q3 FY25 prices), LPG under-recovery is expected to be in the similar range Q-o-Q for all three OMCs, it pointed out.

“While no support was provided in the Union Budget FY26, we believe that OMCs might get at least partially compensated,” it added.