LPG (LPG)

Liquefied Petroleum Gas (LPG) is a fossil-derived mixture of light hydrocarbons — primarily propane (C3H8) and butane (C4H10) — that exists as a gas at standard atmospheric pressure and temperature but liquefies under moderate pressure (5–10 bar). This property allows large volumes of energy to be stored in compact, portable cylinders, making LPG the world's most widely used cooking fuel. LPG is sourced from two streams: as a by-product of natural gas processing (60%) and from crude oil refining (40%). Indian LPG is supplied by IOCL, BPCL, and HPCL under brand names Indane, Bharat Gas, and HP Gas, with around 320 million domestic connections and 12 LPG bottling plants nationwide.

Indian LPG composition is approximately 60% butane and 40% propane (a higher-butane mix suited to warmer climates), with calorific value of 46 MJ per kg and 92 MJ per litre liquid. A standard 14.2 kg domestic LPG cylinder delivers approximately 650 MJ of useful energy at 40% cooking stove efficiency — enough to cook for a four-member household for 25–35 days. Retail prices (Rs 800–1,100 per 14.2 kg cylinder in unsubsidised form as of early 2026) are determined by a formula linked to Saudi CP propane and butane benchmarks, with state-level VAT and central excise modifications. The Pradhan Mantri Ujjwala Yojana has provided over 100 million LPG connections to below-poverty-line households since 2016, displacing wood, charcoal, and dung-cake combustion that contributed to 600,000 annual indoor air pollution deaths.

For the CBG sector, LPG is the principal market competitor at the household and small-commercial scale. CBG distributed through City Gas Distribution networks as Piped Natural Gas (PNG) directly displaces LPG in residential cooking — typically at a 25–35% lower per-MJ cost in cities with CGD coverage. The CBG case against LPG also has strategic dimensions: India imports approximately 60% of its LPG (Rs 80,000 crore per year of forex outflow), while CBG is produced domestically from waste streams. The Ujjwala-2 expansion and the National Bio-Energy Mission both reference LPG substitution as a national policy goal. The economic comparison is straightforward — LPG delivers around 13 MJ/Rs at retail, against CBG/PNG at 17–20 MJ/Rs in CGD-served cities. Where CBG is sold as bio-CNG for vehicles, the direct competitor is fossil CNG and diesel rather than LPG, but the policy logic of displacing imported fossil fuels with domestic renewable methane is identical.