Indian Gas Shortage: Supply Disruptions and Rising Prices
Indian Gas Shortage: Supply Disruptions and Rising Prices
Indian families are grappling with an acute cooking gas shortage as the ongoing conflict in West Asia disrupts vital 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 managed to produce only 12.8 million tonnes domestically. This heavy reliance on imports has intensified the crisis, especially after Qatar, one of India’s top suppliers, declared a production stoppage for LNG and associated products last week.
The Ministry of Petroleum and Natural Gas has responded by ordering all oil refining companies to maximize LPG production for household cooking. “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 result of these supply disruptions, the price of a 14.2kg domestic LPG cylinder has surged by Rs 60, now costing Rs 913 in Delhi. This price increase is particularly concerning for the 33 crore active LPG connections across the country, which are now at risk, as domestic cooking needs take precedence over commercial demands.
Approximately 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports, highlighting the critical nature of these supply chains. GAIL, a major player in the gas sector, has reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, effectively reducing LNG allocations to zero.
In an effort to mitigate the crisis, public sector oil marketing companies 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 ongoing conflict raises questions about the long-term viability of these arrangements.
Details remain unconfirmed regarding the exact impact of the West Asia conflict on future gas supplies, as observers await further developments. The situation remains fluid, and the long-term sustainability of production at current spot prices is also in question.
As the crisis unfolds, it is clear that India’s heavy reliance on imports, particularly those that pass through the Strait of Hormuz, complicates efforts to ensure price stability and supply security for its growing energy needs.
