Impact of Middle East Conflict on India's LPG Supply and Prices
Rising Pressure on Energy Supply
The ongoing military conflict in the Middle East is exerting significant pressure on global energy supplies, which is now affecting the availability and pricing of cooking gas in India. In response, the central government has invoked emergency powers to instruct domestic oil refining companies to ramp up the production of cooking gas. However, reports of delays in the supply of gas cylinders have emerged from various regions across the country.
Government Directives on LPG Production
On March 5, the central government issued an order under the Essential Commodities Act of 1955, mandating all public and private oil refining companies to maximize the production of cooking gas. The government has indicated that the conflict in the Middle East has disrupted supply routes, impacting the gas shipments destined for India. To prevent shortages for domestic consumers, directives have been issued to ensure maximum production using available resources.
Dependence on Imports
It is important to note that a significant portion of India's cooking gas is sourced through imports, with approximately 60% of the total requirement being purchased from abroad. Notably, around 85-90% of these imports come from the Gulf region, primarily through the Strait of Hormuz. The current conflict has created obstacles in this route, leading to a sensitive supply situation. In the fiscal year 2025, India consumed about 31.3 million tons of cooking gas, while domestic production was only 12.8 million tons.
Restrictions on Gas Elements
The central government has also clarified in its order that oil refining companies are prohibited from using propane and butane for the production of any other chemical products. These two elements are essential for cooking gas production. According to the order, these gas streams will be exclusively allocated for cooking gas production, and the finished gas will only be supplied to three public sector marketing companies: Bharat Petroleum, Indian Oil, and Hindustan Petroleum. Additionally, any surplus gas will be sold solely for domestic cooking use, with penalties for violations.
Ensuring Supply for Consumers
This initiative aims to ensure a continuous supply for over 330 million active cooking gas consumers in the country. Furthermore, India is exploring options to import gas from countries outside the conflict zone. Recently, public sector companies have signed an agreement to import gas from the United States, which will supply approximately 2.2 million tons of gas in 2026, accounting for about 10% of India's annual gas imports and aiding in diversifying energy sources.
Shifts in Natural Gas Supply
Companies are also adjusting their priorities regarding natural gas supply to maintain availability in essential sectors such as vehicle fuel, domestic cooking, and the fertilizer industry. India consumes around 195 million cubic meters of natural gas daily, with more than half of this being met through imports. The closure of gas plants by Qatar and disruptions in the Hormuz route have affected the supply of approximately 60 million cubic meters per day, forcing companies to seek gas from alternative sources.
Consumer Concerns in Odisha
In Odisha, delays in the supply of cooking gas have raised concerns among consumers. Families in cities like Bhubaneswar and Cuttack are reportedly waiting up to a month to book a second cylinder, a stark contrast to the previous wait time of just two to fifteen days. Consumers express that they have never experienced such long delays, even during strikes or festive seasons.
Price Increases Amidst Supply Issues
Amidst these challenges, cooking gas prices have also risen since March 7. The cost of a 14.2 kg domestic cylinder has increased by ₹60, with prices in Delhi rising from ₹853 to ₹913. Similarly, the price of a 19 kg commercial cylinder has gone up by ₹115, likely increasing costs for hotels, restaurants, and small businesses.
Government Assurance and Opposition Criticism
The government has assured that the energy supply situation in the country remains satisfactory and that there is no need for panic. Petroleum Minister Hardeep Singh Puri stated that the government's goal is to provide accessible and sustainable fuel to citizens, emphasizing that there is no energy shortage in the country. Conversely, the opposition party Congress has criticized the price hike, labeling it as a burden on inflation.
Conclusion
Overall, the ongoing tensions in the Middle East have disrupted the global energy supply chain, with repercussions reaching India. The government is actively working to increase production, explore new import sources, and strengthen distribution systems, while consumers are currently grappling with rising prices and supply delays.