India is facing one of its worst LPG crises in decades, as disruptions triggered by the ongoing Middle East conflict ripple through global energy supply chains and begin to impact domestic availability of Liquefied Petroleum Gas (LPG).With imports slowing, prices rising and distribution systems under strain, the government has moved to prioritise household supply, cutting allocations for industries and commercial users. The result has been panic buying, long queues outside gas agencies and mounting anxiety across several states.
Queues, panic and disruption
Across cities such as Delhi, Gurgaon, Mumbai, Kolkata, Lucknow and Chennai, long queues outside LPG distribution centres have become a common sight. Women carrying empty cylinders, elderly residents and office-goers are waiting for hours to secure refills.The shortage has also triggered panic buying. Consumers have rushed to book cylinders through mobile apps, websites and IVRS systems, overwhelming booking platforms. Many reported technical glitches, with systems crashing or displaying “server down” messages, forcing people to visit agencies in person.At the peak of the crisis last week, several restaurants temporarily shut down after running out of LPG stocks. Small businesses, especially those dependent on commercial cylinders, have been hit the hardest. Meanwhile, induction cookers have seen a surge in demand as households look for alternatives.Although the Centre has maintained that domestic LPG supplies remain adequate, disruptions in commercial cylinder distribution and reports of shortages have created widespread concern.
Why did the crisis erupt?
The current crisis can be traced back to early March 2026, when military strikes by the United States and Israel on Iran escalated tensions in the region. In response, Tehran effectively tightened control over the Strait of Hormuz, a crucial shipping route through which a significant portion of the world’s energy supplies pass.For India, the impact has been immediate. A big portion of the country’s LPG imports from the Middle East pass through this narrow corridor. Any disruption to traffic through Hormuz directly affects India’s supply chain.India consumed about 31.3 million metric tonnes of LPG last year, with imports accounting for around 60–65% of total demand. Of this, nearly 87% is used in household kitchens, while the rest goes to commercial establishments such as hotels and restaurants, Reuters reported.
How the war exposed India’s LPG import dependence
The crisis has once again highlighted India’s heavy dependence on LPG imports, a structural vulnerability that has grown over the years.Data from the Petroleum Planning and Analysis Cell (PPAC) shows a wide gap between domestic production and consumption. In the first half of FY 2025–26, India produced 6,219 thousand metric tonnes (TMT) of LPG, while consumption stood at 16,200 TMT. Imports filled the gap at 10,731 TMT, translating into an import dependency of around 62%.Over the long term, LPG imports have surged dramatically. From just 1,722 TMT in 1998–99, imports have risen to over 20,667 TMT in 2024–25, a nearly 12-fold increase. LPG now accounts for around 40% of India’s total petroleum product imports, up from just 7.2% in the late 1990s.This rise has been driven by growing demand for cleaner cooking fuel, supported by government schemes and increasing household adoption.
Shipping disruption and rising risks
The conflict has significantly increased risks for vessels travelling through the Strait of Hormuz, located between Iran and Oman. Shipping data shows that tanker traffic has declined sharply, while freight rates have surged.Maritime insurers have responded by withdrawing war-risk cover or sharply increasing premiums, in some cases by over 1,000%. This has made shipments commercially unviable for many operators.As a result, fewer ships are willing to load LPG cargoes from Gulf producers, leading to delays and rising costs. Saudi Aramco’s loading terminal also faced disruptions, further tightening supply.Within the first two weeks of the crisis, weekly LPG inflows to India fell noticeably. Imports dropped from 322,000 tonnes in the week ending March 5 to 265,000 tonnes by March 19. Supplies from the Middle East declined to just 89,000 tonnes, the lowest share since January 2026.Alternative supplies from regions have increased but they take longer to arrive and come at a significantly higher cost.
India’s demand surge?
India’s LPG consumption has grown rapidly in recent years. By FY25, consumption reached 31.3 million tonnes, compared to 29.7 million tonnes in FY24. However, domestic production has remained largely stagnant at around 12.8 million tonnes.Early estimates for FY26 suggest consumption at around 28 million tonnes, with production at about 10.7 million tonnes, again indicating a large gap filled through imports.This growing mismatch between demand and domestic supply has made LPG one of the most import-dependent fuels in India’s energy basket.
Limited storage worsens vulnerability
Another key weakness exposed by the crisis is India’s limited LPG storage capacity.Unlike crude oil, LPG is difficult and expensive to store, as it must be kept in liquid form under pressure. It requires specialised infrastructure such as pressurised cylinders, spherical tanks and underground caverns.India’s total LPG storage capacity is estimated at around 1.9 million tonnes, equivalent to roughly 22 days of supply.High infrastructure costs, geological constraints and the dispersed nature of LPG distribution have limited the expansion of storage facilities. As demand has grown rapidly, storage capacity has struggled to keep pace.
Region-wise data on LPG marketing (As on 01.02.2026)
| Particulars | North | North-East | East | West | South | Total |
|---|---|---|---|---|---|---|
| LPG Active Domestic Customers (in Lakh) | 1005.2 | 127.0 | 677.3 | 697.4 | 824.1 | 3331.0 |
| Non-PMUY Customers (in Lakh) | 693.4 | 63.9 | 338.0 | 471.9 | 712.7 | 2280.0 |
| PMUY Beneficiaries (in Lakh) | 311.8 | 63.1 | 339.3 | 225.4 | 111.4 | 1051.0 |
| LPG Distributors (Numbers) | 8194 | 1120 | 5207 | 5433 | 5646 | 25600 |
| Auto LPG Dispensing Stations (Numbers) | 61 | 0 | 28 | 53 | 247 | 389 |
| Bottling Plants (Numbers) | 65 | 11 | 34 | 50 | 54 | 214 |
Prices rise, black marketing surfaces
The crisis has also led to a rise in prices. Domestic LPG cylinder rates were increased by Rs 60 recently, while commercial cylinder prices rose by Rs 114.5 nationwide.As of March 16, 2026, a 14.2 kg domestic LPG cylinder in New Delhi costs Rs 913, up from Rs 853 earlier.However, consumers say the bigger issue is availability. In several areas, commercial LPG cylinders are reportedly being sold on the black market for nearly double the normal price. Cylinders that typically cost around Rs 1,400 are being sold for as much as Rs 3,000.The shortage has pushed many small businesses to the brink, particularly restaurants, dhabas and food vendors that rely heavily on LPG.
Government steps in to manage supply
In response to the crisis, the government has taken several measures to stabilise supply and minimise disruption. Refineries have been directed to maximise LPG production and divert hydrocarbon streams away from petrochemical feedstocks. The government has also invoked provisions under the Essential Commodities Act to prioritise household consumption.Supplies have been prioritised for households, hospitals and educational institutions, while commercial use has been restricted. States have been asked to increase LPG distribution, with allocations raised to 50% of pre-crisis levels.Commercial LPG supply has also been gradually restored. After an initial 20% allocation, an additional 10% was announced on March 18, followed by another 20% on March 21.Priority sectors for allocation include restaurants, hotels, industrial canteens, food processing units, dairy units, community kitchens and subsidised canteens.
Stranded vessels and supply recovery efforts
India is also working to recover stranded shipments. According to shipping ministry officials, 24 Indian-flagged vessels, including LPG carriers, crude oil ships and an LNG tanker were stranded in the Persian Gulf due to disruptions.Two ships, Shivalik and Nanda, have already reached India, while others such as Pine Gas and Jag Vasant are expected to arrive shortly.Rajesh Kumar Sinha, a senior official in the shipping ministry, said five tankers carrying 230,000 metric tonnes of LPG are currently in the Strait of Hormuz. “Finally, we will have six LPG-loaded carriers,” he said.He added that international law guarantees freedom of navigation through straits, but cautioned that the current situation requires careful monitoring.
Govt reassures, warns against panic
Despite the disruptions, the government has repeatedly assured that there is no shortage of LPG for households.The petroleum ministry dismissed reports about changes in refill booking timelines as false, stating, “no such changes have been made. The existing refill booking timelines remain unchanged and continue to be under the existing system.”Sujata Sharma, joint secretary in the ministry of petroleum and natural gas, said, “All the refineries are operating at high capacity with adequate crude inventories. We have sufficient stock of petrol and diesel. The domestic production of LPG has been stepped up in the refineries.”Prime Minister Narendra Modi also flagged concerns over the situation, describing it as “worrisome.” “The Middle East war set unprecedented challenges for India too. The Middle East conflict zone is an important route for India’s trade with other nations,” he said, while speaking at the Rajya Sabha.“We all know that India imports 60 per cent of its LPG needs. Due to uncertain supply, the government is prioritising domestic supply. LPG production in the country is also being increased,” he added.
Push towards alternatives? Stricter rules for households
Amid the crisis, the government is accelerating efforts to promote piped natural gas (PNG) as an alternative to LPG. States have been urged to fast-track approvals and reduce charges to expand PNG coverage.The Centre has directed that LPG supply to households may be discontinued if consumers refuse to switch to PNG in areas where such infrastructure and connectivity is available. The order is aimed at accelerating gas network expansion and reducing dependence on a single fuel source.Officials said the move is part of a broader strategy to ease pressure on LPG supplies, especially at a time when imports remain disrupted.However, the network currently covers only a limited number of geographical areas, restricting its immediate impact.
The wider economic concern
Experts warn that if the Middle East conflict continues, the consequences could extend beyond LPG shortages. A report by Morgan Stanley said supply disruptions could impact multiple sectors across Asia, including manufacturing, agriculture and transport.“The rise in oil prices, if sustained, will take Asia’s oil burden to above its 10-year average. But beyond the rise in oil prices, we are more concerned about potential disruption risks to supply in the case of LNG,” the report said.As the crisis unfolds, it underscores a deeper structural issue in India’s energy landscape, heavy reliance on imports routed through geopolitically sensitive regions.While diversification efforts are underway, including increased sourcing from the US and other regions, the current crisis shows that supply chains remain vulnerable to global shocks.For millions of Indian households, however, the crisis is more immediate, defined by rising prices and uncertain supply.As tensions in the Middle East continue into their fourth week, the coming days will be critical in determining how India works to stabilise supplies.
