Govt Sets First-Ever LPG Production Targets for Refiners; Reliance's Jamnagar Plant Gets Largest Quota at 18,000 Tonnes a Day

The government has, for the first time, fixed maximum cooking gas production targets for individual refineries and upstream oil and gas companies, turning what began as emergency measures during this year's West Asia conflict into a standing national supply-security framework.

The Petroleum and Natural Gas Ministry's order, issued on August 13, specifies maximum LPG production levels for 21 refineries and upstream producers across the public and private sectors. Combined, these entities have a production potential of 63,810 tonnes a day — more than double India's total domestic LPG output in the financial year ended March 31, 2026, and equivalent to roughly 70% of the country's daily consumption.

Reliance Industries has received the largest individual allocation. Its 33-million-tonne-a-year domestic tariff area refinery at Jamnagar, Gujarat — the unit whose output is sold within India rather than exported — has been assigned a production target of 18,000 tonnes a day, the highest of any single facility in the order. Notably, no target has been set for Reliance's separate, larger 35.2-million-tonne-a-year refinery at the same Jamnagar complex, which is dedicated exclusively to exports and doesn't sell into the domestic market.

Why Reliance Tops the List

The size of Reliance's allocation isn't arbitrary — it reflects the sheer scale of the Jamnagar domestic refinery relative to every other facility covered by the order. Among all 21 entities named, Reliance's 18,000 tonnes-a-day target is followed at a considerable distance by BPCL's Kochi refinery at 4,800 tonnes and Nayara Energy's Vadinar refinery at 4,480 tonnes. Together, these three facilities alone account for 27,280 tonnes of the total 63,810-tonne daily potential — meaning Reliance's single refinery represents close to 30% of the entire national target on its own.

How the Rest of the Industry Is Covered

The order splits responsibility between the public and private sectors. Eighteen refineries owned and operated by public-sector oil companies have been assigned a combined production target of 31,470 tonnes a day. In the private sector, alongside Reliance, Nayara Energy — backed by Russia's Rosneft — has been directed to produce 4,480 tonnes a day from its 20-million-tonne-a-year refinery at Vadinar in Gujarat.

The order does not appear to specify individual targets for every one of the 18 public-sector refineries in available reporting; what's confirmed is their aggregate figure of 31,470 tonnes a day, alongside the two named private-sector allocations.

The Backdrop: A Supply Shock Earlier This Year

To understand why this framework exists, it helps to go back to March 2026, when the conflict in West Asia disrupted global energy flows and exposed a vulnerability in India's LPG supply chain: the country imports close to 60% of its LPG needs, and a large share of that flows through the Strait of Hormuz — precisely the route that came under strain during the crisis.

The government's initial response was reactive and urgent. On March 8, refiners and petrochemical complexes were directed to maximise LPG production by diverting propane, butane, propylene and butene streams — inputs otherwise used for petrochemical manufacturing — into the LPG pool instead. Reliance Industries confirmed at the time that it would maximise LPG output at its Jamnagar complex and divert KG-D6 Basin natural gas to support supply for priority sectors, describing the move as being in line with government guidance and "a national priority."

The measures worked, at least by the government's own account. The Ministry reported that domestic LPG production rose by roughly 25% within days of the March 8 order, and later figures put the increase as high as 40%, according to statements from Joint Secretary Sujata Sharma at inter-ministerial briefings held through March.

Alongside boosting production, the government took several parallel steps to manage demand. Booking intervals for household refills were extended to 25 days to curb hoarding, supplies to industrial and commercial users were initially restricted before being gradually scaled back up, and states were offered additional commercial LPG allocations — first an extra 10%, then a further 20%, eventually taking combined commercial allocation to 50% — with priority going to sectors like hospitals, restaurants, dhabas, and institutional kitchens. Authorities also encouraged a shift toward piped natural gas, whose supply chain was less exposed to the West Asia disruption, and expanded PNG connections to schools, colleges and community kitchens. The government maintained throughout that no retail outlet ran dry, even as it urged citizens to avoid panic buying.

From Emergency Response to Permanent Policy

The August 13 order effectively locks in the lessons of that episode. Rather than relying on ad hoc directives the next time supply comes under pressure, the government now has a standing mechanism: individual production ceilings assigned in advance, which can be activated whenever a supply constraint arises, without needing to negotiate fresh commitments from each refiner in real time.

The framework is also designed to evolve. The government has stated it will review the production targets every six months, factoring in additional capacity as it comes online — whether from new refineries, new oil and gas field discoveries, or technological upgrades at existing facilities.

What It Means for the Sector

For Reliance, the largest allocation confirms the central role its Jamnagar domestic refinery already played during the March crisis, when the company voluntarily ramped up output ahead of the current order. The new target formalises that role as an ongoing obligation rather than a one-time emergency response.

For public-sector refiners, the order distributes responsibility across a broad base of 18 facilities, reflecting their combined importance to the LPG pool even though no single public-sector plant approaches Reliance's individual scale.

For consumers and distributors, the immediate, practical significance of the order lies less in daily life today — production limits are designed to "kick in whenever there is a supply constraint," rather than mandating refiners run at these levels continuously — and more in future resilience. If global disruptions to LPG imports recur, India now has a pre-established production ceiling structure to fall back on, rather than having to build one from scratch under pressure, as happened in March.

What to Watch Next

The first scheduled review of these targets, roughly six months out, will be an early test of how the framework adapts as capacity changes across the sector. It will also be worth watching how the government balances this domestic production buffer against India's continued heavy reliance on imports — at close to 60% of total LPG consumption, even a fully realised 63,810-tonne-a-day domestic production potential would still leave the country dependent on imported supply for a significant share of demand. How much of that import dependence the government aims to reduce over time, and through what additional measures, remains to be seen based on available information.