India's LPG Consumption Declines by 13% Due to West Asia Conflict Disruptions

Amid ongoing conflict in West Asia, India's liquefied petroleum gas (LPG) consumption has seen a significant reduction.  

The disruptions in supply chains, primarily through the Strait of Hormuz, have led to a 13% decrease in LPG usage, impacting both domestic households and commercial entities. 

Impact of West Asia Conflict on India's LPG Supply 

India's LPG consumption hit 2.379 million tonnes in March, showing a 12.8% drop compared to the previous year's 2.729 million tonnes.  

India, which relies on imports for 60% of its LPG needs, faced critical challenges when the Strait of Hormuz was closed following military actions and retaliations involving the US and Iran. 

With supply routes from key exporters like Saudi Arabia and the UAE being affected, the Indian government prioritised household cooking gas over commercial LPG distribution, leading to a 48% reduction in supply to non-domestic users. 

Government's Response to Mitigate Shortfall 

To address the shortfall in imports, the Indian government directed domestic refineries to reduce petrochemical production and boost LPG output.  

Consequently, domestic production rose to 1.4 million tonnes in March, up from 1.1 million tonnes the previous year.  

Despite the March drop, overall LPG consumption in the fiscal year ending March 2026 increased by 6% to 33.212 million tonnes. 

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Alternative Energy and Fuel Sales Trends 

While LPG usage faced setbacks, petrol and diesel sales recorded growth in March, with petrol sales increasing by 7.6% to 3.78 million tonnes and diesel consumption rising by 8.1% to 8.727 million tonnes.  

In contrast, jet fuel consumption remained mostly unchanged due to airspace restrictions over conflict zones. 

Overall Fiscal Year Performance 

The fiscal year saw a varied performance in fuel consumption. Aviation turbine fuel (ATF) sales grew by 2% to 9.161 million tonnes, petrol usage increased by 6.5% to 42.586 million tonnes, and diesel sales were up by 3.6% to 94.705 million tonnes.  

While naphtha and fuel oil consumption dropped, bitumen usage rose by 3% to 8.84 million tonnes. 

Conclusion 

India's LPG consumption in March was notably impacted by the geopolitical tensions in West Asia, leading to significant disruptions in supply. This situation underscores the interconnectedness of global events and regional energy supply chains. The government's response to enhance domestic production coupled with a strategic redistribution of resources played a critical role in mitigating the domestic impact. 

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