Indian Gas Shortage Amid West Asia Conflict
Indian families face an acute cooking gas shortage due to the ongoing conflict in West Asia, which has disrupted supply chains. As the world’s second-largest buyer of liquefied petroleum gas (LPG), India sources over 90% of its supplies from the Middle East, making it particularly vulnerable to geopolitical tensions.
In the fiscal year 2024-25, India consumed 31.3 million tonnes of LPG but produced only 12.8 million tonnes domestically. This heavy reliance on imports has raised concerns about the availability of cooking gas for the approximately 33 crore active LPG connections in the country.
The Ministry of Petroleum and Natural Gas has responded by ordering all oil refining companies to maximize LPG production to meet household needs. “All oil refining companies operating in India shall maximise and ensure that Propane and Butane streams produced, recovered, fractionated or otherwise available with them are utilised for production of liquefied petroleum gas (LPG),” the ministry stated.
As a direct consequence of the supply issues, the price of a 14.2kg domestic LPG cylinder has increased by Rs 60, reaching Rs 913 in Delhi. This price hike is particularly concerning for households that rely heavily on LPG for cooking.
Approximately 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports. However, GAIL reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, reducing LNG allocations to zero. This has raised alarms about potential supply curtailments.
The crisis intensified last week when Qatar, one of India’s top-three suppliers of natural gas, declared a production stoppage for LNG and associated products. GAIL is currently assessing the situation regarding any supply curtailment that may need to be imposed on its downstream customers.
Public sector oil marketing companies have locked in 2.2 million tonnes of US Gulf Coast imports for 2026, which accounts for about 10% of India’s annual needs. However, the ongoing conflict raises uncertainties about whether these measures will be sufficient to stabilize the situation.
India’s heavy reliance on imports that come through the Strait of Hormuz has made total price protection challenging. With 85-90% of LPG imports passing through this critical chokepoint, any disruption can have significant repercussions on domestic supply.
Details remain unconfirmed regarding the exact impact of the ongoing West Asia conflict on future gas supplies. Additionally, the long-term viability of production at current spot prices remains in question, as the situation continues to evolve.
