From delayed tankers in the Gulf to struggling street vendors in Indian cities, the fallout of the Iran war is exposing the fragility of India’s LPG supply chain.
The world is once again watching oil tankers in the Strait of Hormuz. But the real impact of the latest West Asia crisis is unfolding far from the shipping lanes—in kitchens, street stalls and factory floors. As crude flows tighten, a quieter shortage is emerging: liquefied petroleum gas (LPG), the fuel millions rely on to cook their meals and sustain small businesses.
As tensions involving the United States, Israel and Iran disrupt one of the world’s most critical energy corridors—through which roughly 20 percent of global oil trade passes—energy flows have slowed and become increasingly unpredictable. Tankers are being delayed or rerouted, and the knock-on effects are now rippling across fuel markets.
For import-dependent economies, the impact is immediate. Few illustrate this more clearly than India.
When Oil Supply Tightens, LPG Follows
The current shortage is not accidental—it is built into how energy systems function. LPG is largely produced during crude oil refining and natural gas processing. When less crude is processed, LPG output falls.
India’s exposure to this dynamic has grown steadily. Around 60–66 percent of its LPG demand is met through imports, much of it sourced from Gulf producers whose shipments pass through the Strait of Hormuz.
That dependence has deepened alongside rising consumption. India’s LPG use has more than doubled over the past decade, reaching about 31 million metric tonnes in 2024–25. More than 93 percent of that increase has been met through imports, according to the International Institute for Sustainable Development—a trend that leaves domestic supply tightly linked to global disruptions.
Recent data suggests the strain is already visible. State-run fuel retailers—Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum—sold about 1.15 million metric tonnes of LPG in the first half of March, according to Reuters. That is down 17.3 percent from a year earlier and more than a quarter lower than the previous month.
At sea, the bottleneck is just as visible. Indian officials say at least 22 vessels—including LPG carriers, crude tankers and an LNG ship—are currently stranded in or around the Strait of Hormuz, further slowing deliveries.
Even when shipments arrive, they offer only limited relief. A typical LPG carrier brings in around 40,000 to 50,000 tonnes of fuel. Two such vessels would cover only a small share of India’s monthly demand, which exceeds 2.5 million tonnes.
To manage the shortfall, authorities have prioritised household supply. Commercial users in several regions report receiving only a fraction of their usual allocations.
Food Processing Industries Minister Chirag Paswan has sought to reassure the public. “Right now, it is not that much of a concern. Yes, precautionary steps are being taken, but we need to keep an eye,” he said.
Officials say the government is monitoring supplies closely and stepping up enforcement to prevent hoarding and black-market activity.
A Slow-Burning Crisis for Businesses and Households
The consequences are already unfolding across India’s urban and informal economy.
Restaurants are among the hardest hit. Heavily dependent on LPG, many are struggling with erratic supply and rising costs. Industry representatives warn that the situation could escalate quickly.
“We are already receiving reports of severe shortages from cities such as Mumbai, Pune, Aurangabad and Nagpur,” said Pradeep Shetty of the Federation of Hotel and Restaurant Associations of India. “If the situation does not improve within the next two days, nearly 50 percent of hotels and restaurants in Mumbai may be forced to temporarily shut operations.”
Across the sector, businesses are adapting. Restaurateurs have been advised to streamline menus—favouring dishes that require less fuel and shorter cooking times, while cutting back on energy-intensive preparations.
Further down the chain, the strain is more immediate. Millions of street vendors and small food businesses depend almost entirely on LPG cylinders for daily operations, from tea stalls to roadside eateries serving low-cost meals. With supplies tightening and prices rising, these businesses are being squeezed from both sides—forced to raise prices while risking a loss of customers. For many, even short disruptions translate into immediate income loss.
The impact extends beyond food. In Firozabad, a hub for India’s glass bangle industry, LPG cylinders are essential for melting and shaping glass. The sector, which employs thousands of workers, is now facing acute stress.
Dilip Savarthey, a social worker based in Agra district who works with labourers in the industry, says rising fuel costs have made production increasingly unviable. “A 14.2 kg gas cylinder that earlier cost around Rs 900 is now being sold for as much as Rs 3,000,” he said. Workers, many of whom earn between Rs 200 and Rs 300 a day, are unable to absorb the increase.
The timing has added to the anxiety. With the festival of Eid approaching, many families dependent on the trade are uncertain about their incomes in the coming weeks. The disruption highlights how LPG shortages are affecting not just food systems, but also traditional industries and fragile livelihoods.
Households face a quieter but equally significant pressure. LPG has been central to India’s shift away from traditional biomass fuels, improving indoor air quality and reducing health risks. But when supply tightens or prices rise, that transition can stall—or even reverse.
Opposition leaders have seized on the issue. Speaking to reporters, Congress leader Sachin Pilot said, “Reports are coming in from several cities that there is a shortage and prices have risen. So, the direct impact will be on the common man, the middle class,” calling for a full parliamentary discussion.
Energy Choices and Environmental Trade-offs
The LPG crunch is unfolding within a broader energy system still dominated by fossil fuels.
Coal remains the backbone of India’s electricity supply, accounting for more than half of total generation. Globally, it still produces around 36 percent of electricity, underlining how deeply embedded it remains despite the growth of renewables.
In this context, LPG has played a specific role—as a cleaner alternative for cooking rather than a replacement for coal. Its expansion has been one of the more tangible gains in improving everyday energy access. Yet the current disruption exposes its limits.
Cooking practices play a role here. Many staple dishes in Indian households and commercial kitchens rely on high-heat, fast cooking methods—whether for frying, tempering spices or preparing large quantities quickly. These techniques are often better suited to LPG than to slower or less flexible electric alternatives, making a rapid shift to electric cooking difficult in practice.
When LPG becomes unreliable, households and small businesses often fall back on whatever fuel is available. In many cases, that means firewood or charcoal. In densely populated urban areas, such shifts can worsen already severe air pollution. Earlier this year, parts of northern India recorded Air Quality Index levels exceeding 500—classified as hazardous.
The result is a difficult trade-off: a cleaner fuel becomes scarce, while the alternatives carry higher environmental and health costs.
As tensions in West Asia continue, those vulnerabilities are becoming harder to ignore. The LPG shortage is not just a side-effect of an oil shock—it is a reminder that India’s energy security remains closely tied to global fault lines.
For millions of households and small businesses, that reality is already translating into higher costs, uncertain supplies, and difficult choices about how to sustain everyday life