As of March 11, 2026, India is experiencing a significant LPG (Liquefied Petroleum Gas) supply crisis. The shortage has triggered panic buying in several states and is severely impacting both the hospitality sector and household distribution.
​Current Status & Causes
​The crisis is primarily driven by geopolitical instability in West Asia (Middle East), specifically the ongoing conflict involving Israel, Iran, and the U.S.
​Shipping Disruptions: A large portion of India’s LPG imports passes through the Strait of Hormuz. Tensions in this region have delayed shipments, creating a gap between demand and available supply.
​Import Dependency: India imports over 60% of its LPG. While the government is diversifying sources (e.g., from the U.S. and Norway), the longer transit times have caused a temporary “short-term pain” in the supply chain.
​Prioritization Policy: To protect residential users, the Ministry of Petroleum and Natural Gas issued the Natural Gas (Supply Regulation) Order, 2026, which prioritizes domestic households, hospitals, and educational institutions over commercial and industrial sectors.
​Impact on Key Sectors
​1. Hospitality & Restaurants
​This sector is the hardest hit as commercial LPG supply has been severely rationed or temporarily halted in some regions.
​Closures: In major cities like Mumbai, Bengaluru, and Kolkata, nearly 20% of restaurants have reportedly shut down or scaled back operations.
​Menu Changes: Many eateries have reduced their menus to focus on dishes that require less gas or have shortened their operating hours.
​Rising Costs: Commercial cylinder prices have spiked (reaching roughly ₹1,900–₹1,950), and some businesses are reporting black-market rates even higher.
​2. Households
​While the government has prioritized domestic supply, households are still feeling the ripple effects:
​Booking Restrictions: The minimum waiting period between domestic cylinder bookings has been increased from 21 to 25 days to prevent hoarding.
​Price Hikes: Domestic LPG prices rose by approximately ₹60 per cylinder in early March.
​Delivery Delays: Despite “priority” status, many regions report delivery delays ranging from 2 to 8 days.
​3. Transportation & Industry
​Auto-LPG: Scarcity at fuel pumps has reduced the number of LPG-powered auto-rickshaws on the road by nearly 30% in some cities.
​Industrial Output: Industries like glass, tiles, and petrochemicals have had their gas allocations cut by up to 20% to divert supply toward fuel production.
​Government Response
​To stabilize the situation, the following measures have been implemented:
​Boosting Production: Oil refineries have been ordered to maximize LPG output (increasing production by about 10%) by diverting streams previously used for petrochemicals.
​Essential Commodities Act: The government has invoked this Act to regulate distribution and prevent hoarding.
​Sourcing Diversification: India has secured 1 million tonnes of LPG from the U.S. and is engaging with 40 other countries to fill the remaining supply gap.
​Note: Officials have urged citizens not to panic-buy, stating that the shortage is expected to be short-lived as new international shipments begin to arrive.
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