The ongoing war between the U.S.-Israel and Iran is creating stress on India’s liquefied petroleum gas (LPG) supply, which was already heavily import dependent. Last year, the Centre provided ₹30,000 crore to India’s three public sector oil marketing companies (OMCs) – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – to subsidise losses from selling cooking gas at a time of soaring global prices.
Rising Costs and Supply Concerns
The subsidy was announced before the current conflict began, but with the situation escalating, India now faces potential disruptions to LPG supplies and higher global prices. Domestic LPG prices rose by ₹60 per cylinder on March 7, shortly after the conflict began. Brent crude briefly reached nearly $120 a barrel, exceeding $100 for the first time since Russia’s invasion of Ukraine in 2022.
On March 9, the Ministry of Petroleum and Natural Gas directed all domestic oil refining companies to maximize LPG production, exclusively for Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation. Refiners were barred from diverting output for other petrochemical production, and OMCs were directed to supply LPG solely to domestic consumers.
Budgetary Shifts and Import Dependence
This directive comes after the Union budget cut the LPG subsidy allocation by 27%, from ₹15,121 crore to ₹11,085 crore. The Ministry of Petroleum and Natural Gas received ₹30,443 crore for 2026-27.
India currently produces approximately 40% of its LPG requirement, importing the remainder. Imports have surged nearly three-fold in the past decade, reaching over 18 million metric tonnes in 2025-26, up from over 16.48 million metric tonnes in 2020-21.
Regional Concentration of Supply
India’s LPG imports are heavily concentrated in West Asia. In 2025, Qatar supplied about 34% of India’s LPG, making it the largest supplier, followed by the United Arab Emirates (26%) and Kuwait (8.3%). This dependence has been consistent, with Qatar supplying nearly 37% of India’s LPG imports in 2020, the UAE providing 16%, and Saudi Arabia contributing 11%.
The Strait of Hormuz, a critical energy shipping route between Iran and Oman, has been closed since March 1, impacting LPG imports. India’s liquefied natural gas (LNG) imports are as well increasing, reaching 27 million metric tonnes in 2024-25, with half of its LNG also sourced from Qatar.
Frequently Asked Questions
What percentage of its LPG requirement does India produce domestically?
India produces approximately 40% of its LPG requirement.
Which country is currently India’s largest supplier of LPG?
In 2025, Qatar accounted for about 34% of India’s LPG imports, making it the country’s largest supplier.
How much did the Centre pay OMCs last year to subsidize LPG losses?
The Centre paid India’s three public sector oil marketing companies (OMCs) ₹30,000 crore to subsidise their losses for selling cooking gas.
As the conflict continues, will India be able to maintain a stable LPG supply for its growing consumer base?
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