Due to the tension in the Middle East, India along with other countries of the world are also facing gas shortage. But if we talk about India, then India may have to face this problem for the next 3 to 4 years. In a media report, a senior government official said that the disruption in the LPG supply chain across the world may take three to four years to be resolved, because it is not yet clear whether the production has stopped for some time or it has been permanently damaged.
India is largely dependent on West Asia for its LPG supply. In response to US and Israeli military action, Iran attacked energy infrastructure in the region and blocked the Strait of Hormuz, which has adversely affected India’s LPG supplies. Money Control reports that the official, speaking on condition of anonymity, said that based on information received from suppliers, it could take at least three years, and perhaps longer, to resume supplies. He pointed to India’s increasing import risks and cost pressure.
India’s dependence on LPG imports is still very high. About 60 percent of our total consumption is met through imports. Before the war began, about 90 percent of this supply came via the Strait of Hormuz. By March 24, the share of imports from Gulf countries had dropped to 55 percent. This shows that there has been a disruption in supply and we have also discovered new ways of supply.
the journey ahead is long
According to a report in April by Rubix Data Sciences and Vienna Trade Exchange, even after changing supply routes and finding new sources, the impact of supply disruptions could remain up to 4050 percent. Rubix Data Sciences is a risk management and analytics company, while Vyana Trade Exchange is a platform for supply-chain finance and trade data. The official said that the government is focusing on maintaining continuous supply of LPG to households, and is also exploring new supply options to meet the shortage.
The official said that it may take so much time for your LPG supply to be restored because some very important sources of LPG have been closed. It’s not entirely clear what exactly ‘shutdown’ means—either the oil wells have completely dried up or production has stopped altogether—but suppliers themselves are saying it will take at least three years to recover.
The official said that the alternative arrangements that were made during the COVID pandemic can once again prove helpful in reducing the impact of supply disruptions. These alternative arrangements include increasing sources of imports, changing the routes of ships, increasing production within the country and managing demand. The main focus of the government will be on managing consumption patterns and ensuring that there is no interruption in the supply of LPG to households.
Less storage, higher prices
According to the report, the annual demand for LPG in India is around 33 million tonnes, and till mid-March we had only storage capacity equal to 15 days of consumption. In such a situation, the risk of short-term interruption in supply increases due to change in the source of supply, and the impact of price fluctuations also increases. Since mid-March, the prices of domestic cylinders have increased by Rs 60, while the prices of commercial cylinders have increased by Rs 115 during the same period.
Dependence on Gulf countries
UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman together supplied 92 percent of India’s LPG, which was worth $6 billion in FY 2025. The UAE, which has suffered the most impact from Iran’s attacks, imported 41 percent and Qatar 22 percent. Due to this blockage, freight costs and insurance premiums have increased, due to which LPG prices are expected to increase. The emergency measures directing refiners to increase LPG production may also put pressure on gross refining margins.
Higher LPG prices are impacting commercial users like hotels, restaurants and small, medium and large industries. Due to this, the pressure of subsidy on oil marketing companies supplying domestic cylinders is also increasing. Despite being a net exporter of refined petroleum products, India remains dependent on imports for fuels such as LPG, naphtha and fuel oil, making it vulnerable to global price fluctuations and supply disruptions.
