Indian Gas Shortage: Supply Disruptions and Rising Prices
Indian Gas Shortage: Supply Disruptions and Rising Prices
Indian families face an acute cooking gas shortage due to the ongoing conflict in West Asia, which has disrupted vital supply chains. India, the world’s second-largest buyer of liquefied petroleum gas (LPG), sources over 90% of its supplies from the Middle East, making it particularly vulnerable to regional instability.
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 intensified the crisis, as the Ministry of Petroleum and Natural Gas has ordered all refineries to maximize LPG production for household cooking.
The price of a 14.2kg domestic LPG cylinder has surged by Rs 60, reaching Rs 913 in Delhi. This increase is particularly concerning for the 33 crore active LPG connections in India, as domestic cooking needs take precedence over commercial uses, according to the Ministry’s emergency order.
Approximately 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports. However, GAIL reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, reducing LNG allocations to zero. This development raises alarms about the immediate availability of gas for consumers.
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 due to a declaration from QatarEnergy. This has further strained India’s already precarious gas supply situation.
Public sector oil marketing companies (OMCs) have locked in 2.2 million tonnes of US Gulf Coast imports for 2026, which accounts for 10% of India’s annual needs. However, the long-term viability of these arrangements remains uncertain, especially given the fluctuating spot prices in the global market.
GAIL is currently assessing the situation regarding potential supply curtailments that may need to be imposed on its downstream customers. The company’s response will be crucial in determining how the ongoing crisis will affect consumers in the coming months.
Details remain unconfirmed regarding the exact impact of the ongoing West Asia conflict on future gas supplies. Observers are closely monitoring the situation as the potential for further disruptions looms large.
India’s heavy reliance on imports that come through the Strait of Hormuz has made total price protection challenging, leaving consumers vulnerable to price hikes and supply shortages. As the situation evolves, the government and industry stakeholders are expected to explore alternative sources and strategies to mitigate the impact on households.
