Overview
In 2026 the Strait of Hormuz closure tested India’s energy security. While Indian refineries quickly shifted crude sources, the crisis exposed a deeper vulnerability: heavy reliance on imported LPG. The government now plans to replace part of these imports with domestically produced DME made from coal gasification.
Key Developments
- Within weeks of the Hormuz shutdown, non‑Hormuz crude share rose from 55% to 70% thanks to refinery flexibility.
- Domestic LPG output jumped from 35 TMT/day to 54 TMT/day in five days by adjusting fractionation and cracking units.
- The Union Cabinet scheme earmarks ₹37,500 crore to promote coal and lignite gasification, aiming for 100 million tonnes of gasified coal per year by 2030.
- A 20% DME‑LPG blend could cut 6.3 million tonnes of LPG imports annually, saving roughly ₹34,000 crore in foreign exchange.
Important Facts
India’s refinery fleet can process crude from 40+ countries, a capability built over two decades through indigenous R&D, metallurgical upgrades, and skilled operators. In contrast, coal gasification capacity remains limited, and Indian coal has higher ash content than the low‑ash coal used in China’s coal‑to‑chemicals industry.
The indigenous technology to convert methanol into DME was developed by the CSIR’s National Chemical Laboratory. During the crisis, the Centre for High Technology under the Ministry of Petroleum and Natural Gas fast‑tracked its commercial scaling.
Exam Relevance
• Energy security: Shows how technical self‑reliance can complement diplomatic diversification (GS3).
• Policy‑science interface: Illustrates the role of research institutes, ministries, and the Union Cabinet in turning lab‑scale innovation into national strategy (GS3).
• Industrial strategy: Highlights the need for long‑term incentives, such as cost‑sharing and extended coal linkage, to attract capital‑intensive projects (GS3).
• Key personalities: R.A. Mashelkar exemplifies leadership in building strategic scientific assets.
Way Forward
1. Close the ash‑content gap: Invest in coal washing and beneficiation to meet low‑ash standards required for efficient gasification.
2. Scale gasification plants: Leverage the Cabinet’s 20% cost‑share and 30‑year coal linkage to attract private and public capital.
3. Build process expertise: Replicate the two‑decade refinery training model for coal‑to‑chemicals engineers.
4. Monitor market impact: Track DME‑LPG blend adoption, foreign‑exchange savings, and emissions reductions to assess policy effectiveness.
By translating earlier refinery resilience into a coal‑based fuel strategy, India can turn a short‑term shock into a long‑term reduction in import dependence.