India Diversifies LPG Imports Amid Middle East Crisis and Price Shocks

The ongoing conflict in the Middle East has forced India to aggressively rethink its energy security strategy by diversifying Liquefied Petroleum Gas (LPG) sourcing. As global supply disruptions threaten stability, the nation is pivoting away from its heavy reliance on the Gulf to mitigate geopolitical risks.

Strategic Shift Away from Middle East Dependence

Historically, India’s LPG import landscape was highly concentrated, with approximately 90% of supplies sourced from the Middle East. This vulnerability became evident as regional tensions escalated, prompting a rapid shift in procurement patterns. According to a recent Crisil report, India has successfully tapped into new markets to safeguard its energy needs.

The United States has emerged as a major player, with its share of LPG imports surging from just 8% in February to nearly one-third of total imports by April 2026. This shift was bolstered by a massive 2.2 million tonne-per-year supply agreement signed with the U.S. in late 2025, covering roughly 10% of India's annual requirement. Additionally, Iran has rejoined India's import basket, contributing about 6% in April, while supplies have also been sourced from Argentina, Chile, France, and the Netherlands.

Impact on Consumption and Demand Patterns

While diversification has ensured supply continuity, it has come at a cost. Longer supply routes from non-traditional partners have increased freight expenses, contributing to a volatile market. This volatility, combined with rising costs, has led to a noticeable dip in domestic LPG consumption.

After reaching a record 33.2 million tonnes in fiscal 2026, demand saw a significant downturn. Consumption fell to 2.47 million tonnes in April, down from 3.2 million tonnes in February. The most dramatic decline was observed in the commercial and industrial sectors, where market-linked users reacted swiftly to supply limitations and price hikes. By May, year-on-year demand had declined by 20%.

Price Volatility and the Burden on OMCs

The geopolitical crisis triggered a massive spike in international benchmarks. The Saudi Aramco Contract Price, the primary benchmark for Indian imports, jumped 46% between February and June. However, the impact on the Indian consumer has been unevenly distributed.

Чтобы смягчить удар для домохозяйств, нефтемаркетинговые компании (OMC) взяли на себя значительную часть этих расходов. В то время как цена на 19-килограммовый коммерческий баллон выросла более чем на 79%, цена на 14,2-килограммовый бытовой баллон в Дели увеличилась относительно умеренно — примерно на 10%. Этот разрыв привел к огромным недополученным доходам государственных розничных продавцов топлива. Только в мае недополученные доходы по бытовым баллонам в Дели достигли ₹651 за единицу, а совокупные убытки OMC в период с марта по май оцениваются почти в ₹22 000 крор.

Основные выводы

  • Агрессивная диверсификация: Индия резко снизила свою зависимость от Ближнего Востока, увеличив импорт из США почти до 33% от общего объема.
  • Сокращение спроса: Высокие цены и неопределенность поставок привели к 20-процентному годовому снижению потребления LPG к маю.
  • Финансовое давление на OMC: Розничные продавцы топлива взяли на себя значительные ценовые шоки, чтобы защитить домохозяйства, что привело к совокупным убыткам в размере около ₹22 000 крор.