LPG consumption drops 13% in March as West Asia disruptions hit supplies

New Delhi: India’s consumption of cooking gas LPG declined sharply in March, as supply disruptions linked to the West Asia conflict constrained availability for both households and commercial users, according to official data. The total LPG consumption stood at 2.379 Million Tonnes (MT) during the month, down 12.8 percent from 2.729 MT recorded in March last year.

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Imports hit as Strait of Hormuz disruptions bite

India meets about 60 percent of its LPG demand through imports, 90 percent of which passes via the Strait of Hormuz. Supplies were disrupted after US and Israeli attacked Iran on February 28 and Tehran retaliated and imposed a blockade on the route, effectively putting a halt on the shipping.

With shipments from Saudi Arabia and the United Arab Emirates impacted, the government curtailed LPG supplies to commercial establishments such as hotels and industries to prioritise household consumption.

Sharp cuts in non-domestic and bulk usage

Data from the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry showed that LPG supplied to domestic households fell 8.1 percent in March to 2.219 MT. In contrast, supplies to non-domestic users dropped nearly 48 percent, while bulk LPG sales plunged 75.5 percent during the month.

Data contrasts with official supply claims

The PPAC numbers indicated a decline in consumption even as the government maintained that LPG supplies remained normal and that demand from domestic consumers was being fully met.

Refinery diversion boosts domestic output

To manage the supply shortfall, refineries were directed to divert feedstock from petrochemical production towards LPG output. As a result, domestic LPG production rose to 1.4 MT in March from 1.1 MT a year earlier.

Annual production and consumption trends

For the full 2025-26 financial year (April 2025 to March 2026), LPG output increased to 13.1 MT from 12.8 MT in each of the previous two fiscal years. Despite the March dip, LPG consumption for the full fiscal rose 6 percent to 33.212 MT. The longer-term trend in LPG demand has been driven by government efforts to shift households away from firewood and other polluting fuels towards cleaner alternatives.

Mixed demand across petroleum products

The impact of the West Asia conflict was also visible in aviation fuel demand. With airspace closures across parts of the Gulf and flight suspensions, jet fuel or ATF consumption remained almost flat at 807,000 tonnes in March compared with 801,000 tonnes a year ago. In contrast, road fuels recorded strong growth. Petrol consumption rose 7.6 percent to 3.78 MT, while diesel demand increased 8.1 percent to 8.727 MT during the month.

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Full-year fuel demand shows growth

For the full fiscal year, ATF consumption rose 2 percent to 9.161 MT. Petrol demand increased 6.5 percent to 42.586 MT, while diesel consumption was up 3.6 percent to 94.705 MT.

Among industrial fuels, naphtha demand declined 9.9 percent and fuel oil consumption fell 1.4 percent. Bitumen, used in road construction, recorded a 3 percent increase in demand to 8.84 MT in 2025-26.

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