India LPG Consumption Declines 13% In March Due To West Asia Supply Crisis

India’s cooking gas consumption, particularly liquefied petroleum gas (LPG), recorded a sharp decline in March 2026 amid supply disruptions linked to geopolitical tensions in West Asia, according to official data released by the Petroleum Planning and Analysis Cell (PPAC). The fall comes at a time when India continues to rely heavily on imports to meet its domestic fuel demand.

Overall LPG consumption dropped 12.8% year-on-year to 2.379 million tonnes in March, compared to 2.729 million tonnes in the same month last year. The decline was driven by both household and non-domestic segments, reflecting the broader impact of supply constraints on the fuel distribution chain.

Usage in domestic households, which form the bulk of LPG consumption in India, fell 8.1% to 2.219 million tonnes. The sharper decline was seen in commercial and industrial usage, where non-domestic LPG sales plunged nearly 48%, while bulk sales fell by more than 75%, indicating significant restrictions on supply to non-essential sectors.

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Officials attributed the disruption to tensions in West Asia, which affected supply routes passing through key maritime chokepoints, including the Strait of Hormuz. India imports around 60% of its LPG requirement, making it vulnerable to disruptions in Gulf supply chains. Temporary restrictions and rerouting of supplies from major exporters such as Saudi Arabia and the United Arab Emirates further tightened availability.

In response, the government reportedly prioritised domestic households by curbing LPG allocation to commercial establishments such as hotels and industries. Additionally, refineries were directed to divert feedstock from petrochemical production to boost LPG output. This helped domestic production rise to 1.4 million tonnes in March, up from 1.1 million tonnes a year earlier.

Despite the sharp monthly decline, total LPG consumption for the financial year 2025–26 rose by about 6% to 33.212 million tonnes, indicating continued long-term growth driven by the government’s clean cooking fuel initiatives aimed at replacing traditional biomass fuels.

Meanwhile, other fuel categories showed mixed trends. Petrol and diesel consumption recorded strong growth of over 7% and 8% respectively in March, while aviation turbine fuel (ATF) remained largely stable due to disruptions in air travel routes. Industrial fuels such as naphtha saw a decline, reflecting broader demand fluctuations in the manufacturing sector.

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