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- West Asia Conflict Hits Supply; Petrol Diesel Demand Jumps 8% | LPG Consumption Drops 13%
New Delhi40 minutes ago
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Due to the US-Israel and Iran war, there has been a major impact on the country’s LPG supply in March. According to official data, a huge decline of 13% was recorded in domestic LPG consumption in the last month i.e. March.
The main reason for this reduction in supply is the closure of the Strait of Hormuz waterway and the impact of supply from Gulf countries.
Consumption was 2.379 million tonnes in March
According to data from the Petroleum Planning and Analysis Cell (PPAC) of the Petroleum Ministry, LPG consumption stood at 2.379 million tonnes in March. This is about 13% less than the consumption of 2.729 million tonnes in the same period last year.
Even though consumption may have been low in March, the total consumption of LPG in the entire financial year 2025-26 has increased by 6% to 33.212 million tonnes. The main reason for this is the government’s promotion of clean fuel in place of wood and other polluted fuels.
Import interruption due to war
India imports about 60% of its LPG requirement. A large part of it comes via the Strait of Hormuz. The route has been effectively closed following US and Israeli attacks on Iran and Tehran’s retaliatory measures.
After the supply from Saudi Arabia and United Arab Emirates (UAE) was disrupted, the government has cut the supply to commercial institutions like hotels and industries to ensure availability of domestic kitchens.
Commercial and domestic gas sales figures
According to PPAC data, sales of domestic LPG cylinders sold to households declined by 8.1% to 2.219 million tonnes in March. At the same time, sales to non-domestic or commercial users have decreased by about 48%.
A huge decline of 75.5% has been recorded in the sales of bulk LPG. Although the government claims that the supply of LPG is normal and domestic demand is being met, the data shows the opposite situation.
Instructions to refineries to increase production
To meet the supply shortage, the government has instructed refineries to focus on increasing LPG output instead of petrochemical production. Due to this, domestic LPG production increased to 1.4 million tonnes in March, which was 1.1 million tonnes last year.
Total LPG production during the entire financial year 2025-26 (April 2025 to March 2026) stood at 13.1 million tonnes, compared to 12.8 million tonnes in the previous two years.
Demand for petrol and diesel increased
While LPG and aviation fuel (ATF) have been affected due to corrosion, there has been a good increase in the sales of petrol and diesel.
petrol: Its sales increased by 7.6% to 3.78 million tonnes.
diesel: Its consumption increased by 8.1% to 8.727 million tonnes.
ATF: Jet fuel (ATF) consumption remained almost stable due to closure of airspace and cancellation of flights in Gulf countries.
What is ‘Strait of Hormuz’ and why is it important?
It is a narrow waterway between the Persian Gulf and the Gulf of Oman. About 20% of the world’s total petroleum passes through this route. Big exporters like Saudi Arabia, Iraq and Kuwait depend on it.
India imports 50% of its crude oil and 54% of its LNG requirement through this route. The tension here has a direct impact on India’s energy security.
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