Highlights:
- Gas shortages in India emerge after disruptions to LNG and LPG shipments through the Strait of Hormuz
- Government prioritizes gas supplies for households, transport, and LPG production
- Restaurants and hotels warn that cooking gas disruptions could force closures
- Fertilizer plants and other industries receive reduced gas allocations
- India moves to manage supplies as Middle East conflict affects Gulf energy exports
India is facing gas shortages after the conflict in the Middle East disrupted shipments of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) through the Strait of Hormuz, a key global energy route. The Indian government has responded by tightening supply controls and prioritizing essential sectors such as households, transport, and LPG production.
The move follows disruptions linked to the ongoing conflict involving the United States, Israel, and Iran. Tanker movements through the Strait of Hormuz have slowed, affecting exports from Gulf energy producers and reducing the availability of natural gas supplies reaching India.
India is the world’s fourth-largest buyer of LNG and the second-largest importer of LPG. Both fuels are widely used across the country, particularly for cooking gas in homes and commercial kitchens.
The Ministry of Petroleum issued an order on March 10 outlining new supply priorities.
“The ongoing conflict in the Middle East has resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz,” the ministry said in the directive.
The government said the policy shift was designed to protect essential services and maintain stable supply to consumers.
The ministry stated that the new rules were intended to “ensure equitable distribution and continued availability for priority sectors.”
Gas shortages affect restaurants, hotels, and manufacturing sectors
Gas shortages are already being felt across several sectors of the Indian economy. Restaurant and hotel groups say cooking gas supplies have become uncertain, raising concerns about operational disruptions.
The National Restaurant Association of India warned that commercial LPG supply interruptions could significantly affect the hospitality industry.
“The restaurant industry is predominantly dependent on commercial LPG for its operations,” the association said. “Any disruption therein will lead to a catastrophic closure of majority of restaurants.”
Many food businesses rely on frequent LPG deliveries rather than storing large quantities of fuel.
Safety regulations and storage limitations mean most establishments maintain only limited reserves.
In Bengaluru, hotel industry representatives say the situation is becoming increasingly difficult for smaller businesses.
PC Rao, head of a hotel industry association in the city, said smaller outlets currently have only short-term reserves available.
“We have LPG stock for two days. We are working on contingencies,” said Bert Mueller, founder of the California Burrito restaurant chain. “We are conserving gas and installing induction stoves at certain stores.”
Industry groups say larger restaurant chains may have gas supplies for about 10 days, but smaller establishments could run out much sooner if deliveries remain disrupted.
Manufacturing sectors are also seeing early impacts. Ceramic and tile producers have reported reduced gas supplies, which could affect production if shortages continue in the coming weeks.
Government reallocates supply to manage gas shortages
To manage the gas shortages, the Indian government has reallocated available LNG supplies to essential uses. The country consumes about 191 million standard cubic meters of natural gas per day, with roughly half supplied through imports.
Approximately 60 million standard cubic meters per day from Middle Eastern sources has been affected due to tanker disruptions in the Strait of Hormuz.
Under the new allocation system, LNG supplies will be directed first toward LPG production, compressed natural gas used in transportation, and piped cooking gas supplied to homes.
Commercial consumers will receive about 80 percent of their usual gas supply. Fertilizer plants will receive around 70 percent of their normal allocation depending on availability.
Other sectors, including petrochemical plants and power generators, could face deeper supply cuts if disruptions continue.
Petroleum Minister Hardeep Singh Puri said the government was taking steps to ensure consumers do not experience major disruptions.
“We are committed to ensuring an uninterrupted supply of affordable energy to our domestic consumers,” he said in a social media post, adding there was “no reason to panic”.
Middle East conflict worsens global energy supply risks
The gas shortages come as the conflict in the Gulf region disrupts energy production and transport. Ship traffic in parts of the Gulf has slowed, affecting exports from major producers such as Qatar and Saudi Arabia.
Qatar, India’s largest LNG supplier, halted production last week after Iranian strikes on Gulf countries in retaliation for US and Israeli attacks.
With fewer tankers moving through the Strait of Hormuz, LNG shipments to Asia have slowed, affecting energy supplies for several importing countries.
The situation has prompted India’s leadership to review energy supply risks.
Prime Minister Narendra Modi has held discussions with senior ministers including External Affairs Minister S Jaishankar, Petroleum Minister Hardeep Singh Puri, Finance Minister Nirmala Sitharaman, and Commerce Minister Piyush Goyal.
Officials said the prime minister instructed ministries to coordinate efforts to prevent shortages or price increases in petroleum products.
Gas shortages highlight India’s dependence on imported energy
The current gas shortages underline India’s reliance on imported energy, particularly from the Middle East. To reduce supply risks, the country has expanded its energy sourcing strategy in recent years.
India now imports fuel from several countries including the United States, Russia, Venezuela, Australia, and other Oceanic nations.
Diversification efforts have helped reduce exposure to disruptions in any single region. However, the Strait of Hormuz remains a critical route for global energy trade, and prolonged conflict in the area could continue affecting supplies.
For now, the government says priority sectors will continue receiving full gas supply while industries and commercial users adjust to reduced allocations.
