Indian Gas Shortage Amid West Asia Conflict
Indian families are facing an acute cooking gas shortage as the ongoing conflict in West Asia disrupts supply chains, significantly affecting liquefied petroleum gas (LPG) availability. India, the world’s second-largest buyer of LPG, sources over 90% of its supplies from the Middle East, making it particularly vulnerable to regional instability.
In the fiscal year 2024-25, India consumed 31.3 million tonnes of LPG but produced only 12.8 million tonnes domestically. The Ministry of Petroleum and Natural Gas has responded by ordering all refineries to maximize LPG production for household cooking, emphasizing the urgency of the situation.
The crisis has been exacerbated by a recent force majeure notice issued by GAIL’s long-term supplier, Petronet LNG Limited, which has reduced LNG allocations to zero. Approximately 54% of India’s total natural gas consumption is met through LNG imports, highlighting the critical nature of these supply disruptions.
As a result of these challenges, the price of a 14.2kg domestic LPG cylinder has risen by Rs 60, reaching Rs 913 in Delhi. This increase is particularly concerning for the 33 crore active LPG connections in the country, as domestic cooking needs take precedence over commercial demands, according to the Ministry of Petroleum and Natural Gas.
Public sector oil marketing companies (OMCs) have locked in 2.2 million tonnes of imports from the US Gulf Coast for 2026, which accounts for about 10% of India’s annual LPG needs. However, the ongoing conflict has raised questions about the reliability of these future supplies.
Details remain unconfirmed regarding the exact impact of the West Asia conflict on future gas supplies. The situation is further complicated by the fact that 85-90% of LPG imports transit through the Strait of Hormuz, a critical chokepoint for energy supplies.
GAIL is currently assessing the situation concerning any supply curtailment that may need to be imposed on its downstream customers. Observers are closely monitoring developments, particularly after QatarEnergy declared a production stoppage for LNG and associated products, intensifying the crisis last week.
The long-term viability of production at current spot prices remains in question, as the market grapples with the implications of these disruptions. The Indian government is under pressure to ensure that cooking gas remains accessible to households amid rising prices and supply uncertainties.
