India’s LPG Crisis Shows the Cost of Ignoring Domestic Gas Exploration
The recent West Asia conflict and disruptions in the Strait of Hormuz have exposed a structural weakness in India’s energy system. As tensions escalated and shipping routes became uncertain, LPG cargoes to India dropped sharply, forcing the government and oil companies to scramble for emergency supplies. India began sourcing cargoes from the United States, Russia and even Argentina, a country nearly 20,000 kilometres away. For a nation that processes over 230 million tonnes of crude oil every year and operates one of the world’s largest refining industries, the fact that cooking gas for millions of households depends so heavily on imports raises serious questions about long-term energy planning.
How the West Asia War Triggered India’s LPG Supply Shock
The conflict in West Asia disrupted the Strait of Hormuz, a narrow maritime corridor through which a large share of global oil and gas shipments pass. India, which normally imports around 2.2 million tonnes of LPG every month, suddenly saw supplies drop to roughly 1.2 million tonnes during the crisis. This nearly 46 percent decline created immediate concerns about shortages across the country. To prevent disruption to household cooking fuel supply, India secured emergency cargoes from suppliers outside the Gulf region. Tankers began arriving from the United States and Russia, while a smaller but symbolic shipment arrived from Argentina. These measures helped stabilise the market, but they also revealed how quickly a geopolitical shock thousands of kilometres away can affect the daily lives of Indian households.
India’s LPG Demand Has Outgrown Domestic Supply
India’s demand for LPG has expanded dramatically over the past decade. Government welfare initiatives significantly increased the number of LPG connections, bringing cleaner cooking fuel to millions of households. As a result, India now consumes roughly 33 million tonnes of LPG every year. Domestic production, however, remains limited to around 13 to 14 million tonnes annually. The reason lies in how LPG is produced. It is not extracted directly like crude oil but generated mainly as a by-product of crude refining and natural gas processing. Because these processes produce only limited volumes of LPG, India must import nearly 60 percent of its cooking gas requirements every year.
Why More Refineries Will Not Solve the Problem
At first glance, the solution might appear simple: build more refineries and increase LPG output. But the reality of refinery chemistry tells a different story. LPG accounts for only about four to six percent of the products generated when crude oil is refined. Most of the output consists of petrol, diesel, aviation fuel and petrochemical feedstocks. Even if India builds another large refinery processing 20 million tonnes of crude annually, it would produce only about one million tonnes of LPG. That is barely enough to meet three percent of India’s annual demand. The country already has surplus refining capacity and exports significant quantities of petrol and diesel. The real constraint is not refining capability but the availability of domestic natural gas resources.
The Untapped Promise of India’s Offshore Gas Basins
India’s long coastline hides a largely untapped energy opportunity beneath the waters of the Bay of Bengal. The Krishna-Godavari basin and other deepwater blocks in the region are believed to hold significant natural gas resources. Yet exploration and development in these areas have moved slowly. Deepwater drilling requires sophisticated technology and billions of dollars in investment. Past disappointments, particularly in early offshore gas projects that produced less than expected, made investors cautious. Regulatory hurdles and pricing controls also discouraged companies from committing large capital investments. Meanwhile, neighbouring countries such as Myanmar developed offshore gas fields and built pipelines exporting gas to China, highlighting the strategic value of these resources.
Imports Are a Short-Term Fix, Not a Long-Term Strategy
The emergency LPG cargoes arriving from distant countries helped India avoid an immediate crisis, but they cannot be considered a long-term solution. Transporting LPG halfway across the world increases freight costs and exposes the supply chain to further geopolitical risks. Dependence on imports leaves India vulnerable whenever global conflicts disrupt shipping routes or energy markets. Diversifying suppliers may reduce some risks, but it does not eliminate the fundamental problem of structural dependence.
Why Natural Gas Must Become a Strategic Priority
If India wants to reduce its reliance on imported cooking gas, it must focus on developing domestic natural gas resources and expanding pipeline infrastructure. Natural gas can be delivered to homes through piped natural gas networks, eliminating the need for LPG cylinders in many urban areas. The same gas infrastructure also supports compressed natural gas for vehicles, reducing oil imports in the transport sector. By encouraging investment in offshore exploration, reforming pricing policies and accelerating pipeline construction, India can gradually increase domestic gas availability and reduce pressure on LPG imports.
Conclusion
The LPG supply disruption triggered by the West Asia conflict should be viewed as a warning. India’s strong refining industry and diversified crude imports cannot compensate for weak domestic gas production. Emergency shipments from distant suppliers may prevent shortages today, but they do not solve the underlying vulnerability. Unless India invests seriously in developing its offshore gas basins and expanding pipeline networks, future geopolitical crises will continue to threaten the energy security of millions of Indian households. The lesson from this episode is clear. Energy security cannot depend on ships crossing distant oceans. It must begin with resources developed closer to home.
