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LPG shortage fears grow amid Strait of Hormuz closure: How cylinders reach your doorstep
Fears of LPG shortage amid supply disruptions due to Iran-US war has led to black market sales, panic buying and prompted government action.
As tensions refuse to abate in West Asia following the US-Israeli attack on Iran on February 28 and retaliation that followed soon after, the ripple effects have begun reaching Indian households.
The disruption is most visible in the supply of liquefied petroleum gas (LPG), the cooking fuel used by more than 33 crore households across the country.
Government sources said that India is sourcing 70 per cent of the crude oil supply from sources other than conflict-hit Strait of Hormuz, a narrow maritime corridor that connects the Persian Gulf to global markets. However, the strait has turned into a chokepoint after the closure declared by Iran after the US and Israel attacked the country and assassinated their Supreme leader Ayatollah Ali Khamenei.
With the route now facing security risks and shipping disruptions, the supply chain that delivers cooking gas to Indian kitchens is under strain.
Why the Strait of Hormuz is important
The Strait of Hormuz carries roughly one-fifth or 20 per cent of global oil and gas trade, according to reports, making it one of the world's most critical energy routes.
Nearly half of India's crude oil imports pass through the Strait, while a large share of LPG and LNG cargoes also travels along the same route.
India imports nearly 90 per cent of its crude oil and a significant portion of its gas requirements. In FY 2024-25, India’s crude oil imports grew by 4.2 per cent, reaching 242.4 million tonnes (MT). The country’s import dependence also went up, standing at 89.1 per cent in March 2025, compared to 88.6 per cent in the previous year, according to data in exportimportdata.in.
India’s total gas consumption in 2024-25 was about 71.3 billion cubic metres (BCM) with 50.1 per cent import dependency, according to an earlier HT report which cited data from the Petroleum Planning and Analysis Cell (PPAC). The West Asia conflict has disrupted about one-third of total LNG imports, according to experts. The balance of India’s LNG imports comes from the US, Russia, and Australia.
Any slowdown or security threat in the strait can delay shipments, raise freight costs and push up energy prices in importing countries, sparking concerns and panic-buying domestically.
India's growing dependence on LPG
India's LPG consumption has risen sharply over the past decade as government programmes promoted cleaner cooking fuel in both rural and urban households.
According to Central government data, cited in a CNBC report but not independently verified by hindustantimes.com:
-In 2016-17, India logged 21.61 million tonnes of LPG consumption.
-2024-25: 31.32 million tonnes.
-2025-26: 30.86 million tonnes.
This represents a 43 per cent increase in ten years.
The supply chain behind an LPG cylinder
LPG is extracted during natural gas processing or crude oil refining. It is stored in specialised tanks and loaded onto LPG carriers. Many vessels travel through the Strait of Hormuz before heading to India.
Cargoes then arrive at ports such as Mumbai, Kochi, Kandla and Visakhapatnam, following which LPG is taken to plants and transferred into cylinders.
The cylinders are then transported to dealers and delivered to households and businesses.
LPG price rise in India
The pressure on the supply chain has begun to reflect in domestic prices. On March 7, LPG prices were raised by ₹60 across cities. In Delhi, a 14.2-kg domestic cylinder now costs ₹913, while a 19-kg commercial cylinder costs about ₹1,883 after a hike of more than ?110.
Authorities have prioritised domestic gas supplies for households, forcing eateries in cities such as Bengaluru, Mumbai and Gurugram to make changes to menus, reduce gas usage and explore alternative cooking methods. Many restaurants have shifted to coal-based tandoors, induction cookers or electric ovens.
The shortage has also pushed some businesses toward the black market, where cylinders are reportedly selling for ₹2,800- ₹3,000, far above the official price.
Government action so far
The Central Government has introduced a mandatory 25-day gap between LPG cylinder bookings to manage supply. This was decided by the Ministry of Petroleum and Natural Gas to prevent hoarding and ensure that available cylinders are distributed more evenly across consumers.
Earlier, households could book a refill after 21 days.
The government has also taken additional steps:
Refineries have been directed to increase LPG production by 10 per cent. *Due to reprioritisation, domestic LPG production has increased by 10 percent in last few days. Consignment of LPG and LNG is coming from various sources. Expecting some new consignment LPG/LNG very soon," government sources said on Tuesday, reported ANI news agency.
Domestic household supply is being prioritised over commercial or industrial demand.
India is also exploring additional LPG imports from countries such as Algeria, Australia, Canada and Norway to diversify supplies.
Officials say the measure is precautionary and that there is no immediate shortage of LPG.
The government sources said that oil marketing companies will talk to the various restaurant associations to understand their problems of LPG supply
“A committee of 3 members comprising Executive Directors of IOC, HPCL and BPCL has been formed by the govt to listen to their grievances. Their genuine requirement of commercial LPG will be met. This committee will also reprioritise the supply as per the requirements,” the government sources said.
*We were in crises earlier but today we are not in any crises of petroleum products… Indian refineries are running in full capacity as they were operating before the Iran-Israel conflict… We are sourcing 70 percent of our crude oil supply from sources other than Strait of Hormuz," the above-mentioned sources said.
They said India has entered this disruption better prepared, adding that it will recover better than other countries once crises is over.
