Oil Ministry flags safety and compatibility hurdles for LPG-DME blending

India has no national policy, incentive or PSU procurement plan for DME-LPG blending, the Oil Ministry said. The stance keeps commercial users exposed to LPG supply and cost risks, with India importing about 60% of its LPG needs and much of that volume moving through the Strait of Hormuz.

— Source publishedMon, 27 Jul, 2026, 20:32 IST·First seen Mon, 27 Jul, 2026, 20:40 IST·Source BL · Consumer & Economy

What happened

Ministry of Petroleum & Natural Gas · Oil Ministry said DME-LPG blending faces compatibility, safety, handling and calorific-value drawbacks. India has no

Key facts

  • India imports about 60% of its LPG consumption
  • About 90% of imported LPG transits through the Strait of Hormuz

Why this matters

Defer India-focused LPG-DME blending partnerships until safety standards, material-compatibility rules and procurement incentives create a viable commercial pathway.

What to watch

  • Any Strait of Hormuz disruption, shipping-insurance spike or Indian LPG import tender stress.
  • Monthly domestic LPG price revisions and widening Saudi CP/import-parity benchmarks.
  • Oil Ministry, BIS or PESO announcements on DME-LPG standards, cylinder compatibility testing or safety protocols.
  • Indian Oil, BPCL or HPCL pilot projects, procurement notices or blending-infrastructure investments.
  • Expansion of city-gas networks and commercial PNG tariff changes that alter fuel-switch economics.
  • Commercial foodservice price increases or surcharge announcements tied to cooking-fuel inflation.
  • Lock in LPG supply contracts and review hedging or price-pass-through clauses for high-consumption locations.
  • Audit LPG dependence across stores, kitchens, bakeries, cold-chain facilities and last-mile operations; rank sites by disruption exposure.
  • Accelerate feasibility studies for PNG, electric thermal equipment, biogas and energy-efficiency upgrades in high-LPG-use formats.
  • Build menu, pricing and promotion contingencies for restaurant and food retail banners if cylinder prices rise sharply.
  • Seek dual-sourcing and inventory-buffer arrangements with LPG distributors, especially for coastal and import-dependent regions.