West Asia Tensions Hit India LPG Supply, Consumption Sees Sharp Decline

The consumption of LPG in India was significantly reduced in March. According to the statistics provided by the government, the reduction amounted to 13%, reaching 2.379 million tons compared to 2.729 million tons consumed last year during the same period. The reduction was caused by the current unrest in West Asia and issues with supplies. As much as 60% of Indian LPG requirements are imported, mostly through the Strait of Hormuz.

According to reports, supplies from Saudi Arabia and the United Arab Emirates were also disrupted, forcing the government to reduce gas supplies to commercial consumers such as hotels and industries to secure domestic cooking gas. Domestic LPG cylinder consumption also declined by 8.1 percent in March to 2.219 million tons. Non-domestic consumption also declined sharply, by nearly 48 percent. Bulk LPG sales also fell by more than 75 percent.

In this context, it is crucial to understand the government's stance on supply in India and what the data indicates. Despite the disrupted energy supply, the Indian government maintains that gas supply to domestic consumers remained normal. However, data indicates a decline in consumption. To address this shortfall, the government directed refineries to reduce petrochemical production and increase LPG production. This led to an increase in domestic production to 1.4 million tonnes, up from 1.1 million tonnes last year.