India is a major importer of natural gas. The country consumed about 190 million metric standard cubic metres per day (mmscmd) of gas on average during April-October last year, with a significant portion of this demand being met through imports.
The Strait of Hormuz is one of the world’s most critical energy supply chokepoints. The route is currently witnessing severe disruptions to tanker traffic as Iran continues to target vessels attempting to pass through the corridor. The situation has forced several global suppliers to issue force majeure notices on gas shipments.
Here is a breakdown of the ongoing gas crisis and how it is affecting India. Natural gas is a hydrocarbon-rich fuel used to produce LPG, LNG and other gas products. LPG is also produced during crude oil refining, meaning disruptions in crude markets can indirectly affect LPG supplies as well.
How India imports gas
LPG (liquefied petroleum gas) is stored and transported in liquid form and is widely used in household cooking cylinders as well as in commercial establishments. Much of India’s imported LPG arrives through sea shipments, and a large share of these cargoes transit through the Strait of Hormuz.
LPG remains the most closely tracked fuel during the crisis because it directly affects household cooking costs. India imports more than 60% of its LPG consumption, and roughly 85–90% of these imports typically pass through the Strait of Hormuz.
CNG, meanwhile, is compressed natural gas used primarily as a transport fuel and is considered a cleaner alternative to petrol and diesel. India imports natural gas in liquefied form, known as LNG (liquefied natural gas). Once LNG cargoes arrive at import terminals, the fuel is regasified and supplied through pipelines or compressed further for use as CNG.
India is the fourth-largest LNG importer globally after China, Japan and South Korea. The country sources around two-thirds of its LNG supplies from Qatar, the UAE and Oman, according to data from Kpler.
Also Read | AMFI Data: Equity mutual fund inflows rise 8% to Rs 25,977 crore in February
How the gas crisis unfolded
Rising geopolitical tensions in the Middle East triggered a fresh supply shock last week after Qatar halted liquefied natural gas production at a major export facility following an Iranian drone attack on the infrastructure.
The shutdown disrupted LNG cargo supplies to several countries, including India. The facility is one of the world’s largest LNG export terminals and plays a critical role in global gas trade.
Following the disruption, QatarEnergy issued a force majeure notice citing its inability to fulfil supply commitments to Petronet LNG, India’s largest LNG importer. Shipping companies also faced difficulties sending LNG carriers through the Strait of Hormuz due to escalating security risks.
As a result, state-run gas utility GAIL said its LNG supplies under its long-term contract routed through Petronet LNG had effectively fallen to zero during the disruption, tightening gas availability across several downstream sectors.
Gas prices soar
Amid the supply disruption, gas prices have risen sharply in India. Domestic cooking gas now costs about Rs 60 more per cylinder, while the price of commercial LPG has increased by Rs 114.5.
European natural gas prices also surged nearly 40% last week after QatarEnergy halted production at the key LNG facility amid escalating Middle East tensions.
Supply shortages have been reported in several cities, including Mumbai and Bengaluru, with restaurants in some areas warning of potential closures due to insufficient fuel availability.
India imports more than 60% of its LPG consumption, and roughly 85–90% of these imports normally pass through the Strait of Hormuz. The country consumed about 31.3 million tonnes of LPG in FY25, of which only 12.8 million tonnes were produced domestically.
The Indian government has begun regulating LPG supplies during the ongoing disruption.
“In light of current geopolitical disruptions affecting fuel supply and constraints on LPG availability, the ministry has directed oil refineries to increase LPG production and divert the additional output towards domestic consumption,” the Ministry of Petroleum and Natural Gas said in a post on X.
“The ministry has prioritised domestic LPG supply to households and introduced a 25-day inter-booking period to prevent hoarding and black marketing. Imported LPG supplies are being prioritised for essential non-domestic sectors such as hospitals and educational institutions,” it added.
The government has also issued the Natural Gas (Supply Regulation) Order, 2026, to prioritise gas allocation for PNG, CNG and LPG production during the supply crunch. However, concerns remain that prolonged tensions in the Middle East could extend supply disruptions and keep gas prices elevated.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)