First time in a decade: India’s LPG households base falls by 6.2 million in Apr-Aug period

For the first time in more than a decade, the number of liquefied petroleum gas (LPG) households has declined in India. This drop is linked to supply constraints caused by the Iran war, which led oil companies to stop issuing new connections and focus on managing existing ones.

According to a report in The Economic Times, India's active domestic LPG customer base fell by 6.2 million between April and August, marking the first decline in over ten years.

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The number of active domestic LPG customers decreased to 327.7 million at the start of September from 333.9 million in April, as per the ministry data. The customer base under the government's Ujjwala scheme for poor households also declined by about 0.6 million to 105.7 million.

The decline follows years of steady growth in LPG adoption. The active customer base more than doubled from 148.6 million at the beginning of 2015-16 to 333.9 million at the start of the current fiscal year. Growth rates, which ranged from 11.9% to 19.6% between 2014-15 and 2018-19, slowed to around 5% or less in recent years, as per the report.

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This fiscal year, the overall customer base contracted by about 1%. The Iran war has affected LPG supplies from the Gulf region, which accounted for around 90% of India's imports before the conflict. Due to tighter supplies, oil marketing companies stopped issuing new LPG connections and began Aadhaar-based biometric verification to identify inactive customers, multiple connections within families, and customers with access to piped natural gas (PNG), according to industry executives.

The government has encouraged customers in areas with PNG infrastructure to switch to natural gas. City gas companies added nearly 0.6 million PNG customers until July, bringing the total to 17.5 million. Billed PNG customers increased by 1.06 million to 10.7 million. The shift to PNG accounts for about one-sixth of the 6.2 million LPG customers lost.

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Southern India recorded the largest decline, losing 2.63 million LPG households since the end of March, followed by western India with 1.62 million and northern India with 1.5 million. Eastern India lost 0.34 million.

At the beginning of September, northern India had the largest LPG customer base at 99.3 million, followed by southern India at 79.8 million, western India at 68.3 million, and eastern India at 67.5 million.