Navigating the Indian energy trilemma: the role of liquefied petroleum gas
In 2022-23, India’s LPG consumption was 28.5 million tons (MT) and production was 12.8 MT. At over 41.1 percent, LPG imports accounted for the largest share of petroleum product imports in 2022-23. Domestic LPG consumption accounted for over 89 percent of total consumption. The adoption of LPG by low-income households in rural and urban India was accelerated through the provision of government subsidies. The welfare gains associated with subsidies for energy access for cooking are often higher than the long-term costs involved in providing the subsidy. Smaller LPG canisters may increase affordability for weekly-wage earners and promote LPG use among poor households, eventually paving the way for an LPG-subsidy phase-out. The decentralised nature of LPG enables it to be transported through multiple modes to access difficult terrains. As a relatively cleaner fuel than petrol and diesel, promoting the use of LPG in the transportation sector will contribute to the reduction of pollution. LPG can also serve as a robust and affordable backup energy source for villages with off-grid renewable-energy solutions. It can also enable small-scale industries in rural areas to flourish. As LPG supply does not require specialised infrastructure, it can be scaled up easily and, under the right conditions, eventually replaced with renewable LPG (rLPG). Easing regulatory burdens on the use of LPG without compromising on safety will create more avenues for the private sector to become involved in the sourcing and distribution of LPG. This may also open up the co-benefit of greater LPG access for domestic and service-sector consumers.
