India’s LPG consumption drops sharply amid West Asia supply disruptions

India’s consumption of liquefied petroleum gas (LPG) has fallen sharply in the first half of March, as supply disruptions linked to the ongoing conflict in West Asia impact availability, according to preliminary industry data.

LPG usage declined to around 1.15 million tonnes during the first fortnight of the month, marking a drop of over 17 per cent compared with the same period last year. Demand was also significantly lower than the first half of February, reflecting a steep month-on-month contraction.

The decline comes as India, which imports roughly 60 per cent of its LPG requirements, faces supply constraints due to disruptions in the Strait of Hormuz — a critical channel for energy imports that has been effectively shut amid escalating hostilities.

With shipments from key suppliers such as Saudi Arabia and the United Arab Emirates affected, authorities have reportedly curtailed LPG supplies to commercial users, including hotels and industrial units, in order to prioritise domestic cooking needs.

Data from state-run fuel retailers, which dominate the market, indicates that LPG demand during March 1–15 was markedly lower than in the corresponding periods of both 2024 and 2023. This represents a notable departure from recent trends, where LPG consumption had been rising steadily at an annual rate of 3 to 4 per cent, supported by government initiatives promoting cleaner cooking fuels.

The impact of the regional conflict has extended to other fuel segments as well. Aviation turbine fuel (ATF) consumption declined due to disruptions in air travel following airspace closures across parts of the Gulf region.

In contrast, demand for transport fuels remained strong. Petrol consumption rose by over 13 per cent year-on-year during the period, while diesel sales increased by more than 8 per cent, signalling continued resilience in road transport and economic activity.

The diverging trends highlight how geopolitical tensions are selectively affecting energy demand patterns, with supply-sensitive fuels like LPG bearing the brunt, even as broader mobility-driven consumption holds firm.

With PTI inputs