India’s LPG consumption dropped sharply in March 2026, falling 13% compared to the same month a year earlier. Total consumption fell to 2.379 million tonnes, down from 2.729 million tonnes in March 2025. The decline’s tied directly to the closure of the Strait of Hormuz, which disrupted over 90% of India’s LPG imports.
The crisis was linked to escalating tensions in West Asia involving the US, Israel, and Iran. India imports around 60% of its LPG, mostly from Saudi Arabia and the UAE. When the strait closed, those shipments stopped. India’s limited storage made the situation worse, and the country quickly faced an energy crisis.
When the Strait of Hormuz closed, India’s LPG lifeline from Saudi Arabia and the UAE simply stopped.
The government responded fast. The government reportedly directed refineries to maximize LPG output. Refineries were told to divert petrochemical feedstock to produce more LPG instead. Production jumped to 1.4 million tonnes in March, up from 1.1 million tonnes a year earlier. All output was channeled exclusively to state oil companies IOCL, BPCL, and HPCL.
Household users were protected the most. Reportedly around 85–87% of available LPG went to domestic customers. Domestic household sales fell only 8.1% to 2.219 million tonnes. But commercial and industrial users weren’t so lucky. Non-domestic sales plunged nearly 48%, and bulk LPG consumption collapsed by 75.5%. These sectors faced massive shortages as the government prioritized homes.
Despite the tough March, the full 2025–26 fiscal year told a different story. Total LPG consumption for the year grew 6% to 33.212 million tonnes. Domestic production for the full year also rose to 13.1 million tonnes from 12.8 million tonnes the year before. The commercial sector bore the brunt of rationing, with many establishments forced to adopt limited menus or shut down entirely. Jet fuel consumption remained largely flat at 807,000 tonnes in March, compared to 801,000 tonnes a year earlier, as Gulf airspace closures affected flight operations.
India’s LPG demand has roughly doubled over the past decade. That growth makes supply disruptions like this one especially painful for millions of households and businesses.
References
- https://energy.economictimes.indiatimes.com/news/oil-and-gas/indias-lpg-consumption-plummets-128-amid-west-asia-supply-crisis/130366307
- https://www.ptinews.com/story/business/india-lpg-consumption-slides-13-pc-amid-west-asia-conflict/3580611
- https://takshashila.org.in/content/publications/20260318-Policy-Responses-to-India-LPG-Supply-Crisis.html
