LPG Prices Surge Amid Ongoing West Asia Conflict

The recent hike in liquefied petroleum gas (LPG) prices in India, driven by the ongoing conflict in West Asia, has raised concerns about inflation and economic stability. With the cost of a 14.2 kg cylinder now reaching Rs 913 in Delhi, experts warn that prolonged geopolitical tensions could further impact fuel costs and weaken the rupee. The situation is compounded by India's heavy reliance on imported crude oil, which accounts for a significant portion of its energy needs. As the conflict escalates, the implications for domestic energy security and inflationary pressures are becoming increasingly critical. Read on to explore the full impact of these developments.

By Narendra Chaudhary Mar 7, 2026, 09:19 IST

Rising Costs of Liquefied Petroleum Gas

The cost of liquefied petroleum gas (LPG) has increased by Rs 60 per cylinder due to fluctuations in global energy prices, coinciding with the ongoing conflict in West Asia, which has now entered its eighth day.

As a result, the price for non-subsidized LPG cylinders has risen to Rs 913 for a 14.2 kg cylinder in Delhi. In other cities, the prices are Rs 939 in Kolkata, Rs 912.5 in Mumbai, and Rs 928.5 in Chennai.

This price adjustment took effect on Saturday.

The pricing of cooking gas in India is managed by the Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.

Earlier this month, the cost of commercial LPG, which is utilized by businesses such as hotels and restaurants, was raised by Rs 114.5 for a 19 kg cylinder, bringing the price to Rs 1,883 in Delhi.

With this latest increase, the 14.2 kg LPG cylinder has reached its highest price since August 2023.

Domestic LPG prices are influenced by international crude oil prices, which affect fuel costs and supply decisions in the energy sector.

As of Saturday, the benchmark Brent crude price hit $87 per barrel, reflecting a 20.8% rise since February 27, when it was $72.87. This surge followed a joint operation by Israel and the US on February 28 aimed at diminishing the capabilities of the Iranian government.

In retaliation, Iran targeted US military bases and Israeli interests in the region, striking major cities in Gulf nations and some maritime vessels.

On Monday, Iran announced that the Strait of Hormuz was 'closed' to shipping traffic, threatening to set ablaze any vessel attempting to navigate through this crucial waterway.

This narrow passage connects the Gulf to the Arabian Sea and is vital for global petroleum transport, with approximately 20% of the world's petroleum liquids passing through it.

Potential Economic Implications

‘Prolonged war could raise fuel costs, weaken rupee’

The price hike occurred shortly after India's Ministry of Finance indicated that the ongoing conflict in West Asia has escalated geopolitical risks surrounding the Strait of Hormuz, contributing to rising oil prices.

Given India's significant dependence on imported crude oil, the ministry warned that this situation could lead to increased imported inflation, higher fuel costs, and a weakened rupee, complicating the inflation outlook for the country.

India imports around 80% to 85% of its energy needs, making it a net importer of oil and gas.

Despite this heavy reliance, the ministry noted that India possesses adequate foreign exchange reserves, a low current account deficit, and manageable inflation levels.

These factors help mitigate the effects of rising global crude oil prices and maintain domestic energy security.

However, if the conflict continues, it could have significant repercussions for the exchange rate and current account deficit, potentially exacerbating inflationary pressures.

Additionally, sectors reliant on liquefied natural gas (LNG) and crude oil, such as fertilizers and petrochemicals, may face challenges if the crisis persists.