Intro
India diversified LPG imports during the West Asia conflict, boosting supplies from the US and others to strengthen energy security.
New Delhi
India significantly diversified its liquefied petroleum gas (LPG) import sources during the recent West Asia conflict, reducing its reliance on traditional Gulf suppliers and strengthening energy security amid geopolitical uncertainty.
According to a report by Crisil, the country’s LPG import pattern changed considerably as disruptions in West Asia affected global energy markets. Traditionally, nearly 90 per cent of India’s LPG imports have originated from the Gulf region. However, by April 2026, the United States accounted for almost one-third of India’s LPG imports, a sharp increase from just 8 per cent in February.
The shift was supported by a long-term agreement signed between India and the United States in late 2025 for the supply of 2.2 million tonnes of LPG annually. The deal is expected to meet around 10 per cent of India’s yearly LPG import requirements. Iran also re-entered India’s import portfolio, contributing nearly 6 per cent of imports in April. Additional cargoes were sourced from countries such as Argentina, Chile, France and the Netherlands.
While diversification ensured uninterrupted supplies during the conflict, it also resulted in longer transportation routes and higher freight expenses. Rising international prices and logistical costs placed pressure on domestic markets and contributed to a decline in LPG consumption.
India’s LPG consumption fell from 3.2 million tonnes in February to 2.47 million tonnes in April. After reaching a record 33.2 million tonnes in FY26, demand weakened significantly, declining 13 per cent year-on-year in March and April and dropping 20 per cent in May.
Commercial and industrial users were most affected because they are exposed to market-linked pricing. Household demand remained relatively stable due to limited increases in retail cooking gas prices.
Crisil reported that international LPG benchmark prices rose 46 per cent between February and June. Despite this, domestic cooking gas prices increased only modestly, leading to under-recoveries of Rs 651 per cylinder in May. State-owned oil marketing companies absorbed cumulative losses of nearly Rs 22,000 crore during March-May.
