Indian Gas Shortage Amid West Asia Conflict

Indian Gas Shortage Amid West Asia Conflict

Indian families face an acute cooking gas shortage as the ongoing conflict in West Asia disrupts supply chains. India, the world’s second-largest buyer of liquefied petroleum gas (LPG), 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 nation’s 33 crore active LPG connections.

The Ministry of Petroleum and Natural Gas has ordered 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),” stated a ministry official.

As the crisis deepened, GAIL reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, reducing LNG allocations to zero. GAIL is currently assessing the situation regarding any supply curtailment that may need to be imposed on its downstream customers.

The price of a 14.2kg domestic LPG cylinder has increased by Rs 60, now reaching Rs 913 in Delhi. This price hike comes at a time when approximately 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports, with 85-90% of LPG imports passing through the strategically vital Strait of Hormuz.

Public sector oil marketing companies (OMCs) have locked in 2.2 million tonnes of US Gulf Coast imports for 2026, which accounts for 10% of India’s annual needs. However, the crisis intensified last week when Qatar, one of India’s top-three suppliers of natural gas, saw QatarEnergy declare a production stoppage for LNG and associated products.

Details remain unconfirmed regarding the exact impact of the ongoing West Asia conflict on future gas supplies. Observers are particularly concerned about the long-term viability of production at current spot prices, which may further complicate India’s energy landscape.