LPG consumption falls 8% in H1 2026 as West Asia conflict disrupts supplies

India's liquefied petroleum gas (LPG) consumption fell 8% year-on-year during the first half of 2026 as the West Asia conflict disrupted imports through the Strait of Hormuz, limiting fuel availability across the country. However, supplies are now improving, commercial LPG prices have been cut, and the government expects the situation to normalise in the coming weeks.

According to provisional data from the Petroleum Planning and Analysis Cell (PPAC), India's LPG consumption stood at around 14.74 million tonnes (mt) during January-June 2026, compared with 15.95 mt in the same period last year.

LPG demand falls

The decline was driven by supply constraints rather than weaker demand. India imports nearly 60% of its LPG requirement, with about 90% of those imports sourced from the West Asia Gulf region. Most of these cargoes pass through the Strait of Hormuz, making India vulnerable to disruptions in the strategic shipping route.

Consumption during June fell nearly 17% year-on-year to around 2.18 mt. On a month-on-month basis, however, demand recovered by more than 2% as additional LPG cargoes, particularly from the United States, reached Indian ports. Between March and June, the US emerged as India's largest LPG supplier.

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May records lowest LPG consumption

The impact of the supply disruption was most evident in May, when LPG consumption dropped to around 2.13 mt, the lowest monthly level in more than five years. The decline came despite LPG remaining the primary cooking fuel for over 33.5 crore households, including more than 10.5 crore beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY).

The Petroleum and Natural Gas Ministry has said domestic LPG, piped natural gas (PNG) and compressed natural gas (CNG) supplies are now being maintained at 100% across the country. Commercial LPG supplies, which were curtailed during the crisis to prioritise household consumers, have also been restored to pre-crisis levels. Online refill bookings have recovered to 98%, and no LPG distributorships are facing stock-outs, according to the ministry.

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Commercial LPG supplies restored

Reflecting the easing supply situation, Indian Oil reduced the price of 19-kg commercial LPG cylinders from July 1 by ₹173 to ₹183.50 across major cities. However, prices of 14.2-kg domestic LPG cylinders remained unchanged.

Petrol, diesel prices

The improving outlook also comes as global crude oil prices have softened. Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Thursday said petrol and diesel prices could be reduced if international crude prices remain low over the next few weeks. He noted that oil marketing companies are currently refining crude purchased during the peak of the West Asia conflict, when prices were significantly higher, delaying the impact of lower global prices on retail fuel rates.

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Government eyes larger strategic fuel reserves

Puri said oil marketing companies incurred losses of ₹74,781 crore by selling petrol, diesel and LPG below cost up to June 30. Including under-recoveries from the previous year, the cumulative impact stood at around ₹2.1 lakh crore.

The minister also said the recent crisis highlighted the need for India to strengthen its energy security by expanding crude oil and fuel storage capacity. At present, the country's crude inventories at ports, refineries, terminals and strategic petroleum reserves are sufficient for about 76-80 days. He said the government would work towards building larger reserves while global oil prices remain favourable.