India’s LPG Import Burden Could Be Cut by 20% Through DME Blending, Report Says

As global energy markets remain volatile and West Asia conflicts continue to disrupt traditional fuel supply chains, India is exploring a strategic shift to reduce its reliance on imported liquefied petroleum gas (LPG). A recent report highlights that blending LPG with dimethyl ether (DME) — a clean-burning fuel derived from coal or biomass — could cut the country’s LPG import burden by up to 20%, saving billions in foreign exchange annually.

This approach gains urgency as India, the world’s second-largest LPG importer, seeks to insulate its domestic energy supply from geopolitical shocks while advancing its broader goals of energy security and emissions reduction.

Understanding the LPG Import Challenge

India imports nearly half of its LPG consumption, with the majority sourced from the Middle East. In fiscal year 2023–24, the country imported approximately 12 million metric tons of LPG, valued at over $8 billion, according to data from the Petroleum Planning and Analysis Cell (PPAC), under the Ministry of Petroleum and Natural Gas.

Recent conflicts in West Asia, including the Israel-Hamas war and Red Sea shipping disruptions, have heightened concerns about supply reliability. These disruptions have led to freight delays and increased costs, prompting Indian policymakers to seek alternatives that reduce import dependency.

What Is DME and How Does It Function in LPG Blending?

Dimethyl ether (DME) is a synthetic fuel that can be produced from various feedstocks, including coal, natural gas, biomass, or even captured carbon dioxide. It shares similar combustion properties with LPG, making it suitable for utilize in existing LPG infrastructure — including cylinders, regulators and household stoves — with minimal modifications.

When blended with LPG at concentrations of up to 20%, DME can function as a drop-in substitute. Studies by the Indian Institute of Petroleum (IIP), a constituent lab of the Council of Scientific and Industrial Research (CSIR), have demonstrated that a 20% DME-LPG blend maintains safety, efficiency, and performance standards comparable to pure LPG.

DME burns cleaner than conventional LPG, producing lower particulate matter and negligible sulfur emissions, which aligns with India’s National Clean Air Programme (NCAP) and its commitments under the Paris Agreement.

Potential Savings and Scale of Impact

According to a 2024 analysis by the Energy and Resources Institute (TERI), blending 20% DME into LPG could reduce India’s annual LPG import requirement by 2.4 million metric tons. At current market prices, this would translate to savings of approximately ₹34,200 crore (about $4.1 billion) per year in foreign exchange outflow.

The report further notes that domestic DME production could be scaled using India’s abundant coal reserves, particularly through coal-to-DME plants. Pilot projects are already underway in collaboration with Coal India Limited and NTPC Limited, exploring integrated coal gasification and synthesis routes to produce DME at competitive costs.

Government Initiatives and Policy Support

The Indian government has signaled support for alternative fuels through various initiatives. In its 2023 Energy Transition Report, NITI Aayog identified DME as a promising avenue for reducing import dependence in the cooking gas sector. The Ministry of Petroleum and Natural Gas has also included DME in its long-term roadmap for alternative transport and cooking fuels.

the Pradhan Mantri Ujjwala Yojana (PMUY), which has provided LPG connections to over 100 million households, presents a vast distribution network that could be leveraged for introducing DME-blended LPG without requiring new infrastructure.

Challenges and the Road Ahead

Despite its promise, widespread adoption of DME-LPG blending faces several hurdles:

• Production Scale: Current DME production capacity in India remains limited. Scaling up will require significant investment in coal gasification, synthesis, and purification units.
• Cost Competitiveness: While DME can be produced domestically, its cost must remain competitive with imported LPG, especially when global prices are low.
• Regulatory Approvals: Blending ratios and fuel quality standards need formal endorsement by bodies such as the Bureau of Indian Standards (BIS) and the Petroleum and Explosives Safety Organisation (PESO).
• Public Awareness: Consumer trust is essential. Clear communication about safety, performance, and environmental benefits will be key to acceptance.

Experts suggest a phased rollout, beginning with pilot programs in select states, followed by gradual expansion as production capacity and regulatory frameworks mature.

Conclusion

Blending LPG with DME represents a pragmatic and forward-looking strategy for India to mitigate the risks of import dependency, enhance energy security, and support cleaner cooking solutions. While challenges remain in scaling production and aligning regulations, the potential economic and strategic benefits are substantial.

As India navigates a complex global energy landscape, innovations like DME blending could play a vital role in building a more resilient, self-reliant, and sustainable energy future — one household at a time.

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