India’s LPG Consumption Declines 13% in March Due to Middle East Supply Disruptions
India’s cooking gas consumption experienced a significant decline in March, with liquefied petroleum gas (LPG) usage dropping by 13 percent compared to the previous year. This decrease, attributed to supply disruptions caused by the ongoing conflict in the Middle East, saw LPG consumption fall to 2.379 million tonnes from 2.729 million tonnes in March 2022. The situation has been exacerbated by interruptions in the Strait of Hormuz, a crucial route for India’s fuel imports, affecting supplies from major exporters like Saudi Arabia and the UAE.
Government Response to Supply Shortages
In response to the LPG supply shortages, the Indian government has prioritized household consumption over commercial use. This decision led to a significant reduction in LPG supply to commercial establishments, including hotels and industries. According to reports from the news agency PTI, sales of LPG to domestic users fell by 8.1 percent, totaling 2.219 million tonnes. The impact on commercial users was even more pronounced, with LPG sales plummeting nearly 48 percent. Furthermore, bulk LPG consumption saw a staggering decline of 75.5 percent. These figures raise questions about the government’s claims that household demand was being fully met, as the data from the Petroleum Planning and Analysis Cell (PPAC) suggests otherwise.
Boosting Domestic Production
To mitigate the impact of the supply disruptions, Indian authorities have taken steps to increase domestic LPG production. With approximately 60 percent of the country’s LPG needs met through imports, the government directed refineries to shift feedstock from petrochemical production to LPG manufacturing. As a result, LPG production rose to 1.4 million tonnes in March, up from 1.1 million tonnes in the same month last year. For the entire fiscal year 2025-26, production increased to 13.1 million tonnes, compared to 12.8 million tonnes in the previous two years. Despite the decline in March, overall LPG consumption for the fiscal year rose by 6 percent to 33.212 million tonnes, indicating a steady long-term growth trend driven by the adoption of cleaner fuels.
Trends in Overall Fuel Consumption
The ongoing conflict in the Middle East has also affected other fuel consumption patterns in India. Jet fuel (ATF) demand remained nearly unchanged at 807,000 tonnes in March, largely due to airspace restrictions imposed by Gulf countries. In contrast, petrol and diesel demand showed resilience, with petrol consumption increasing by 7.6 percent to 3.78 million tonnes and diesel usage rising by 8.1 percent to 8.727 million tonnes, according to PTI. Among industrial fuels, naphtha consumption decreased by 9.9 percent, and fuel oil saw a decline of 1.4 percent. However, the demand for bitumen rose by 3 percent during the fiscal year, suggesting ongoing activity in road construction and infrastructure development.
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