India is grappling with a significant shortage of liquefied petroleum gas (LPG), commonly known as cooking gas, in March 2026. This crisis has led to long queues at distribution centers, delays in household cylinder refills, and disruptions for commercial users such as restaurants and hotels. The situation is particularly acute for non-household consumers, as the government has prioritized supplies for domestic kitchens. Despite India being home to the world’s largest single-site refinery complex at Jamnagar (operated by Reliance Industries), the shortage persists. The paradox lies in the fundamental difference between how LPG is produced and India’s heavy reliance on imports for this specific fuel.
The Immediate Cause: Geopolitical Disruption in the Strait of Hormuz
The primary trigger for the current crisis is the ongoing conflict in West Asia, involving Iran, the United States, and Israel. This has severely disrupted shipping through the Strait of Hormuz, a narrow maritime chokepoint critical for global energy flows. India sources a substantial portion of its LPG imports from the Middle East, with approximately 85–90% of these shipments traditionally passing through the strait. As traffic has slowed to a near standstill due to security risks and restrictions, import volumes have plummeted, creating immediate supply constraints.
India’s annual LPG consumption stands at around 31–33 million metric tonnes, with imports meeting roughly 60% of this demand (approximately 18–20 million tonnes). Domestic production covers only about 40%, leaving the country highly vulnerable to any interruption in Middle Eastern supplies. In contrast, petrol and diesel supplies remain stable because India refines most of its transport fuels domestically from a more diversified mix of crude oil sources, including significant volumes from Russia that bypass the strait.
The disruption has prompted panic buying, anti-hoarding measures under the Essential Commodities Act, and new guidelines spacing out cylinder bookings (25 days for urban households and 45 days for rural ones) to manage demand. Consumption data for early March 2026 shows a notable decline in sales, reflecting both supply shortages and reduced commercial usage.
Why the Jamnagar Refinery Cannot Fully Compensate
The Jamnagar complex in Gujarat is the world’s largest integrated refining hub, with a massive capacity that contributes to India’s position as one of the top global refiners. India’s overall refining capacity exceeds 250 million tonnes per annum across multiple facilities. However, LPG is merely a minor byproduct of crude oil refining—typically accounting for only 4–5% of output. Refineries are optimized to maximize higher-value products like petrol (around 17% yield) and diesel, rather than LPG (propane and butane fractions).
Domestic LPG production has remained largely stagnant at around 12–13 million tonnes annually since 2017–18, even as refining capacity has expanded. In response to the crisis, the government directed refiners—including Reliance at Jamnagar—to maximize LPG output by redirecting propane and butane streams from petrochemical uses. This has resulted in a reported increase of 10–25% in domestic production, with extra volumes prioritized for household use. While helpful, these measures fall short of closing the import gap entirely.
Structural Factors Behind the Vulnerability
India’s LPG demand has surged dramatically over the past two decades, driven by population growth, urbanization, and government initiatives like the Pradhan Mantri Ujjwala Yojana, which has provided subsidized or free connections to over 10 crore poor households, pushing total connections beyond 33 crore. This has multiplied consumption several times since the late 1990s, outpacing domestic supply growth.
Refining priorities have focused on transport fuels, where India has achieved self-sufficiency and even export status, but LPG’s share in refinery output has not kept pace. Limited storage infrastructure—LPG requires specialized pressurized or refrigerated facilities—means the country operates with minimal buffers (often just days of stock for LPG, compared to strategic reserves for crude oil).
Government Response and Long-Term Outlook
Authorities have acted swiftly: boosting domestic output, securing alternative import routes and sources (including from the US, Norway, Canada, and Russia), diverting natural gas from fields like KG-D6 to priority sectors, and restricting commercial supplies to protect households. Officials emphasize that household supplies remain secure and that there is no need for panic, with some shipments successfully navigating the strait.
The crisis highlights India’s chronic import dependence on LPG and the need for structural reforms. Long-term solutions include expanding domestic gas processing, diversifying import sources further, building more storage capacity, and accelerating the shift toward alternatives like piped natural gas (PNG), induction stoves, and electricity for cooking in urban areas.
In essence, while India’s refining prowess ensures abundance in petrol and diesel, LPG’s status as a low-yield byproduct combined with massive import reliance through a single vulnerable chokepoint has exposed the country to this acute shortage. The current disruption underscores the broader challenge of energy security in an import-dependent economy facing geopolitical volatility.
About The Author
