Why LPG Took the Blow Amid Strait of Hormuz Crisis?

Mumbai, March 15: While the escalation of the West Asia conflict has threatened India’s overall energy security, the impact on Liquefied Petroleum Gas (LPG) has been immediate and visible compared to the relatively stable supply of petrol and diesel. As the Strait of Hormuz remains effectively closed to commercial shipping for a third week, long queues have formed at gas agencies across India, and hundreds of commercial eateries have been forced to suspend operations.

The "Hormuz choke" has disproportionately affected the LPG sector because of the geographic concentration of India’s suppliers. While India has successfully diversified its crude oil sources over the last two years, buying heavily from Russia, Africa, and North America, its LPG supply chain remains tethered to the Persian Gulf. Approximately 60% of India’s total LPG is imported, and a staggering 90% of those imports must pass through the 21-mile-wide Strait of Hormuz. When this maritime artery was severed following the US-Israeli strikes on Iran, nearly half of India’s total cooking gas supply was disrupted overnight. LPG shortage: Restaurant Operations Stabilise as Eateries Adopt Induction Cooking and Menu Adjustments Amid Supply Constraints.

Why LPG Taking the Blow Amid Strait of Hormuz Crisis

The primary reason LPG took the first hit is the sheer math of India’s import reliance. Unlike petrol and diesel, which are refined domestically from a diverse mix of global crude oil, LPG is a finished product that is highly concentrated in the Gulf. Major suppliers like Saudi Arabia, Qatar, and the UAE account for the bulk of India’s "bottled gas" needs.

Because of this concentration, any maritime instability in the Persian Gulf acts as an immediate "on-off switch" for the Indian LPG market. While the government has recently secured emergency cargoes from the United States, Algeria, and Norway, these shipments must travel significantly longer routes and will take weeks to replenish the national supply. Indian Government Bars LPG Refills for Consumers With Piped Gas Connections Amid Middle East War.

The 'Storage Gap': Gas vs Liquid Fuel

A critical structural vulnerability lies in how India stores its energy. India maintains massive Strategic Petroleum Reserves (SPR) in underground salt caverns in Visakhapatnam and Mangaluru, capable of powering the country's transport sector for weeks. However, no such large-scale strategic reserve exists for LPG.

Current LPG storage facilities in India provide a buffer of only 1.4 lakh tonnes, which is equivalent to less than two days of national consumption. This "just-in-time" supply model works efficiently during peacetime but offers no insulation during a sustained blockade, causing delivery delays to reach households just 48 hours after the initial disruption at sea.

Ministry Response

To mitigate the shortage, the Ministry of Petroleum has issued a Natural Gas Control Order, directing all refineries to prioritise LPG production above all other petrochemical byproducts. Refineries have been told to channel 100% of propane and butane streams into the domestic cooking gas pool, a move that has increased local production by 28% in the last five days.

Additionally, the government has increased the mandatory gap between domestic cylinder bookings from 21 to 25 days to curb panic-buying. While two Indian vessels, the Shivalik and Nanda Devi, successfully navigated the Strait under naval escort on Saturday, officials warn that a return to "normalcy" depends entirely on the safe reopening of the Gulf corridors.

(The above story first appeared on LatestLY on Mar 15, 2026 03:46 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).