Two-thirds of India’s LPG imports pass through the Strait of Hormuz — here’s why the US-Iran conflict is an energy security crisis hiding in plain sight for 30 crore Indian households
By P. SESH KUMAR
New Delhi, March 11, 2026 — India’s kitchens rarely appear in geopolitical briefings, yet the simmering conflict involving the United States, Israel and Iran has the potential to reach directly into millions of Indian homes. Nearly two-thirds of India’s liquefied petroleum gas (LPG) imports transit through the Strait of Hormuz — a narrow maritime chokepoint now clouded with strategic uncertainty. Even the perception that Iran might disrupt shipping in the strait has already rattled global energy markets.
The Strait That Controls the Flame
Few waterways on earth carry the strategic weight of the Strait of Hormuz. Barely 40 km wide at its narrowest point, it is the artery through which nearly one-fifth of the world’s petroleum liquids move daily. Tankers carrying crude oil, LPG and LNG from the Gulf states-Saudi Arabia, Qatar, the UAE, Kuwait and Iraq-pass through this corridor before reaching energy-hungry markets such as India, China and Japan.
For India, the dependency is stark. Over 60 percent of India’s LPG imports originate from the Middle East, and a substantial portion travels through Hormuz before entering Indian ports such as Kandla, Mundra, Mumbai and Kochi. Any disruption-whether from military confrontation, shipping insurance withdrawal, or naval blockade — immediately raises freight costs, delays cargoes, and constricts supply chains.
Iran has repeatedly warned that escalation in regional hostilities could compel it to close or disrupt shipping in the strait. Even without a full closure, sporadic missile strikes, drone threats or naval confrontations have already raised war-risk insurance premiums, are deterring shipping companies, and delaying tanker schedules. In energy markets, perception alone can drive prices upward.
When energy markets panic, the first tremor is felt not in refineries but in households
India’s LPG Dependence: The Quiet Vulnerability
India’s cooking fuel transformation over the last decade — especially through the Pradhan Mantri Ujjwala Yojana (PMUY) — has dramatically expanded LPG penetration. More than 30 crore households now rely on LPG cylinders. This social achievement, however, rests on a delicate supply architecture.
Domestic LPG production meets only about 45–50 percent of India’s consumption, with the remainder met through imports. The gap has steadily widened as demand rises faster than refinery output.
Under normal conditions, the system functions smoothly. Import cargoes arrive at coastal terminals, LPG is botted into cylinders, and millions of trucks distribute them across the country. But this logistical ballet depends heavily on predictable maritime flows.
If Hormuz traffic slows or insurance costs spike, cargoes may arrive weeks late or become significantly more expensive. Even short disruptions could create temporary shortages in bottling plants and distribution depots.
India does maintain strategic petroleum reserves, but dedicated LPG strategic reserves are limited, typically covering only a few weeks of consumption within the supply chain.
In practical terms, this means that the buffer between geopolitical turmoil and a kitchen stove going cold is not very large.
The Inflationary Domino
Energy prices transmit rapidly into inflation, and LPG is among the most politically sensitive fuels in India.
If LPG import prices spike due to Hormuz disruptions, oil marketing companies-Indian Oil, BPCL and HPCL — face a difficult choice. Either they pass the increase to consumers or absorb losses that must eventually be compensated by government subsidies.
Historically, LPG prices in India have oscillated between market alignment and political restraint. When global prices surge sharply, governments often intervene to shield consumers.
But the arithmetic can become punishing.
Every ₹100 increase in the cost of a domestic LPG cylinder, if subsidised for tens of millions of households, can translate into thousands of crores of additional fiscal burden.
At the same time, if the government chooses not to cushion the increase, inflationary effects spread rapidly. Cooking fuel is a core household expense, especially for lower-income families.
For poorer households, LPG refills are already a significant outlay. A sharp price rise could push many families back toward biomass fuels such as firewood or coal, reversing years of progress in clean cooking initiatives.
This regression would not merely be an economic setback — it could also have public health implications, increasing indoor air pollution and respiratory disease risks.
Ripple Effects on PNG and Urban Gas Networks
Urban households in cities such as Delhi, Mumbai and Ahmedabad increasingly rely on Piped Natural Gas (PNG) for cooking. At first glance, PNG might appear insulated from LPG supply shocks.
In reality, the two markets are interconnected.
PNG distribution networks depend partly on domestic natural gas fields and partly on imported LNG. LNG cargoes from Qatar and other Gulf exporters also transit through the Strait of Hormuz.
If geopolitical tensions disrupt LNG shipments or raise shipping costs, the price of natural gas delivered to city gas distribution companies will increase.
This cost escalation could push up PNG tariffs for households and compressed natural gas (CNG) prices for vehicles. Thus, the ripple from Hormuz could travel far beyond LPG cylinders into urban transportation costs and electricity generation.
In effect, a geopolitical tremor in the Gulf could ripple through India’s entire energy pricing ecosystem.
LNG Imports and Energy Security
India imports roughly half of its natural gas consumption as LNG, with Qatar being one of the largest suppliers. Long-term LNG contracts provide some insulation from immediate market volatility, but shipping disruptions can still affect deliveries.
In extreme scenarios, tankers might reroute via longer maritime routes, increasing freight costs and delivery times. The energy security challenge is therefore not merely about price but about logistical continuity.
India’s energy planners have long recognised the vulnerability of maritime chokepoints. Yet the structural dependence on Gulf energy persists because alternatives remain limited. Supplies from the United States, Australia or Africa require longer shipping routes and higher costs. Pipeline imports from Central Asia remain stalled due to geopolitical complications.
Thus, the Strait of Hormuz remains an unavoidable gateway.
Fiscal Pressures and the Subsidy Question
The Indian government has historically used LPG subsidies as a social safety valve. Subsidies are targeted primarily toward poorer households, particularly beneficiaries of the Ujjwala scheme. If global LPG prices rise sharply, the government faces three options.
First, it could allow full price transmission, placing the burden directly on consumers. Second, it could expand subsidies, increasing fiscal expenditure. Third, it could partially absorb the increase through oil marketing companies. None of these options is painless.
A large subsidy expansion could strain the fiscal deficit at a time when government spending is already stretched across infrastructure, welfare and defence commitments. On the other hand, allowing prices to rise sharply risks political backlash and economic hardship among lower-income households. This tension between fiscal prudence and social protection lies at the heart of India’s LPG policy dilemma.
The Household Reality
For policymakers, energy markets are charts and import volumes. For ordinary households, they are far simpler: the ability to cook meals.
If LPG prices rise steeply or supplies become irregular, households may begin rationing cylinder use. Families might delay refills, cook fewer hot meals, or revert to traditional fuels. Such behaviour has already been observed during past price spikes.
The paradox is striking. India has successfully connected millions of households to LPG networks, but affordability remains fragile. The risk today is that geopolitical conflict thousands of kilometres away could quietly erode one of India’s most celebrated social welfare achievements.
LPG: A Social Necessity
India’s energy security strategy must recognise that LPG is no longer merely a petroleum product — it is a social necessity. Strengthening resilience requires multiple layers of intervention. The country must accelerate the creation of strategic LPG reserves, similar to crude oil stockpiles, to cushion temporary disruptions. Diversifying import sources beyond the Gulf region, including long-term contracts with African and American suppliers, can reduce reliance on the Strait of Hormuz.
Domestically, expansion of bio-LPG and ethanol-based cooking fuels could gradually reduce dependence on imported hydrocarbons. Scaling up compressed biogas projects under the SATAT initiative could also provide locally produced alternatives.
Urban gas networks must diversify LNG sourcing and enhance storage capacity to manage temporary supply shocks. Most importantly, the government must maintain a carefully calibrated subsidy regime that protects poorer households without distorting fiscal stability.
Energy transitions are rarely smooth, but foresight can prevent crisis. For India, the lesson is clear: geopolitical tremors should not be allowed to extinguish the flame in millions of kitchens.
(This is an opinion piece. Views expressed are author’s own.)
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