West Asia Conflict Severely Impacts India's LPG Imports via Strait of Hormuz
The West Asia conflict and closure of the Strait of Hormuz have critically impacted India's LPG imports, cutting off over 50% of supply due to its 90% dependency on the chokepoint. While crude oil and LNG are less affected by diversification and existing stocks, the government has implemented drastic measures for LPG, including prioritizing household supply, boosting domestic production, promoting alternative fuels like kerosene, and appealing against panic-booking to manage the acute shortage.
The West Asia conflict has profoundly impacted India's energy imports, with the LPG sector experiencing the most severe disruption due to its heavy reliance on the Strait of Hormuz. India imports approximately 60% of its LPG, and a critical 90% of these imports typically transit through the Strait. With this vital waterway effectively closed, an estimated 54% of India's total LPG supply has been cut off, leading to the country's worst gas supply crisis in recent history.In response, the government has implemented drastic measures. It has prioritized LPG supplies to households over commercial and industrial consumers, mandated refineries to maximize domestic LPG production by diverting petrochemical streams, and extended waiting times for cylinder bookings. To mitigate shortages for non-household users, alternative fuels like kerosene, biomass, and coal have been promoted. Amid widespread reports of hoarding and panic-booking, authorities have appealed to consumers to book only when necessary, activated crackdowns on black marketing, and urged a switch to piped natural gas where available. Although domestic LPG production has increased by 30% from pre-conflict levels, this only offsets a small fraction of the total consumption, leaving a significant supply gap.In contrast, crude oil and LNG supplies have been less affected. India's reliance on the Strait of Hormuz for crude is lower (around 40%), and it has greater flexibility to diversify imports, notably from Russia, alongside substantial strategic reserves. While natural gas also faces stress (30% supply cut), the government has prioritized critical sectors like household PNG, CNG, and LPG production, and is actively seeking spot LNG cargoes from non-West Asian regions. The article underscores that LPG's unique vulnerability stems from its overwhelming dependency on the Strait of Hormuz, unlike other energy commodities.
