Indian Gas Supply Crisis Amid West Asia Conflict
Indian families are facing an acute cooking gas shortage as the ongoing conflict in West Asia disrupts supply chains. India, the world’s second-largest buyer of liquefied petroleum gas (LPG), sources more than 90% of its supplies from the Middle East, making it particularly vulnerable to such geopolitical tensions.
In the fiscal year 2024-25, India consumed 31.3 million tonnes of LPG but produced only 12.8 million tonnes domestically. This heavy reliance on imports has raised concerns about the stability of supply, especially as the price of a 14.2kg domestic LPG cylinder has surged by Rs 60, now reaching Rs 913 in Delhi.
The Ministry of Petroleum and Natural Gas has responded to the crisis by ordering all refineries to maximize LPG production for household cooking. This directive comes as approximately 33 crore active LPG connections are at risk, with domestic cooking needs taking precedence over commercial uses, as noted in an emergency order.
Public sector oil marketing companies (OMCs) have locked in 2.2 million tonnes of imports from the US Gulf Coast for 2026, which represents about 10% of India’s annual LPG needs. However, the situation remains precarious as GAIL reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, effectively reducing LNG allocations to zero.
Currently, about 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports. The crisis intensified last week when Qatar, one of India’s top-three suppliers of natural gas, experienced a production stoppage for LNG and associated products, further complicating the supply landscape.
GAIL is assessing the situation regarding potential supply curtailments that may need to be imposed on its downstream customers. The heavy reliance on imports that transit through the Strait of Hormuz has made total price protection challenging for India.
Observers are closely monitoring the situation, as the exact impact of the ongoing West Asia conflict on future gas supplies remains unclear. Additionally, the long-term viability of production at current spot prices is in question, raising further concerns about the stability of the Indian gas market.
Details remain unconfirmed as the government and industry stakeholders navigate this complex and evolving scenario.
