India’s energy security has come under sharp focus as disruptions triggered by the ongoing West Asia conflict expose a critical vulnerability in the country’s liquefied petroleum gas (LPG) supply chain. What began as a geopolitical disturbance in one of the world’s most sensitive regions has rapidly escalated into a domestic challenge with far-reaching consequences, affecting households, businesses and the broader economy. The crisis has revealed not just immediate supply constraints but also deeper structural weaknesses in India’s energy architecture that have been building for years.
India today stands as the world’s second-largest consumer of LPG, with demand reaching roughly 31 million metric tonnes annually. This demand is driven by more than 330 million households that rely on LPG as their primary cooking fuel, reflecting a massive transformation in the country’s energy consumption patterns over the past decade. However, this transformation has come with a cost. Domestic production meets only about 38 to 40% of the requirement, leaving nearly 60% dependent on imports. More critically, over 85% of these imports transit through the Strait of Hormuz, a narrow maritime corridor that has now become a focal point of geopolitical tensions.
The Strait of Hormuz is not just another shipping route; it is one of the most strategically important energy chokepoints in the world, handling close to 20% of global petroleum liquids consumption. For India, its significance is even greater, as the majority of LPG supplies from key partners such as Qatar, the United Arab Emirates, Kuwait and Saudi Arabia pass through this route. Under normal circumstances, the corridor ensures efficient delivery, with transit times ranging between five to eight days. But in times of conflict, this dependence turns into a major vulnerability, as disruptions can quickly choke supply with little room for immediate alternatives.
The current crisis has already demonstrated how fragile this system is. Weekly LPG imports have dropped by as much as 30 to 40% in the immediate aftermath of the disruption, creating a significant supply shortfall. With monthly demand typically hovering between 2.8 and 3.0 million metric tonnes and domestic production contributing only around 1.2 million metric tonnes, the gap has forced authorities to introduce rationing measures. Available supply has been estimated at approximately 1.6 million metric tonnes, enough to sustain only about 22 days of reduced consumption, highlighting the urgency of the situation.
The economic impact has been swift and visible. Prices of domestic LPG cylinders have increased, with a 14.2 kg cylinder in Delhi rising to ₹913, while commercial cylinders have surged to over ₹2,000. These increases, combined with global crude prices crossing $100 per barrel, are feeding into broader inflationary pressures. Consumer price inflation, which stood at 3.4% in March 2026, is projected to rise to an average of 4.6% during the fiscal year. At the same time, the emergence of a black market has further distorted the situation. Reports indicate that domestic cylinders priced at ₹950 are being sold for as much as ₹2,000 to ₹3,000, while commercial cylinders have reached prices of up to ₹6,000 in informal markets.
The ripple effects of the crisis extend far beyond household kitchens. While the government has prioritised domestic consumption to protect vulnerable populations, the burden has shifted to commercial and industrial users. Restaurants, hotels and catering businesses have experienced supply cuts ranging from 30 to 50%, leading to revenue losses of up to 30%. In many urban centres, small eateries and food vendors have been forced to shut down temporarily. The impact on industry has been equally severe. Sectors such as ceramics, steel and engineering, which rely heavily on LPG, have faced production disruptions, with some units operating below capacity or halting operations altogether.
In response to the shortage, many businesses have turned to alternative fuels such as diesel, which are not only more expensive but also more polluting. This shift has underscored a critical gap in India’s energy transition strategy, the lack of reliable, scalable and clean alternatives that can serve as substitutes during crises. Renewable energy sources such as solar and wind, while expanding rapidly, remain intermittent and insufficient to meet industrial demand without robust storage solutions. As a result, the crisis has pushed some sectors toward more carbon-intensive options, undermining environmental goals.
The environmental consequences are already becoming evident. The shortage of LPG has led to increased reliance on biomass fuels such as firewood, particularly in the hospitality sector. Prices of firewood have risen sharply, from around ₹2 per kilogram to nearly ₹6 per kilogram, as demand surges. This reversal to traditional fuels not only increases air pollution but also erodes the gains made under initiatives aimed at promoting clean cooking energy.
The roots of this crisis lie in a structural imbalance that has developed over time. India’s LPG consumption has doubled from 15 million metric tonnes in 2012 to around 31 million metric tonnes in 2025, largely driven by the success of government programs that expanded access to clean cooking fuel. However, this rapid growth in demand has not been matched by corresponding investments in supply diversification, storage infrastructure, or alternative energy systems. The country currently lacks strategic LPG reserves, with existing commercial stocks covering less than two days of national consumption, leaving it highly exposed to supply shocks.
The government has moved quickly to contain the immediate fallout. Emergency measures have been implemented to boost domestic production, including directing refineries to maximise LPG output, resulting in a 28 to 40% increase in production. Demand-side interventions such as introducing a 25-day booking gap in urban areas and enforcing stricter delivery authentication have been aimed at curbing misuse and ensuring equitable distribution. Diplomatic efforts have also yielded some relief, with Iran allowing Indian vessels to pass through the Strait of Hormuz, although the situation remains volatile, with war-risk insurance rates rising by over 1,000%.
Despite these efforts, experts argue that the current response addresses only the symptoms, not the underlying causes. Diversifying supply sources is one immediate solution, with alternative routes from the United States, Argentina and Australia offering potential relief. However, these options involve significantly longer transit times often exceeding 40 days and higher costs, making them less viable as long-term solutions.
The crisis has also highlighted the need for a broader transformation of India’s energy system. Expanding the use of piped natural gas, scaling up domestic production of compressed biogas and investing in renewable energy backed by long-duration storage are seen as critical steps toward reducing dependence on imports. India’s biogas potential alone is estimated at 60 to 70 million metric tonnes of LPG equivalent annually, offering a substantial opportunity to strengthen energy security while supporting sustainability goals.
Equally important is the development of strategic reserves and infrastructure. Countries such as Japan and China maintain reserves covering 120 to 250 days of consumption, while India’s reserves remain minimal. Calls are growing for the country to build at least 90 days of strategic reserves and to leverage existing infrastructure, including railway networks, to create a distributed storage system. Expanding energy infrastructure along the eastern coast is also being viewed as a priority to reduce dependence on western ports and improve resilience.
The ongoing LPG crisis serves as a stark reminder that energy security cannot be taken for granted. It underscores the need for a diversified and resilient energy system that can withstand geopolitical shocks and ensure reliable access for all segments of society. As India continues its journey toward becoming a developed economy by 2047, the lessons from this crisis will be crucial in shaping a more secure and sustainable energy future.
