New Delhi: An LPG crisis across the country seems imminent if flow of traffic through the Strait of Hormuz remains disrupted for weeks.
People aware of the situation have told ET that India is weighing a series of contingency measures – including restricting petrol and diesel exports, ramping up crude purchases from Russia and introducing demand-management steps such as LPG rationing – to address potential fuel shortages, as reported by News18.
The deliberations involve senior government officials and industry executives, reviewing both supply- and demand-side options amid escalating tensions in West Asia, ET has reported.
Brent crude futures rose nearly 10% to around $80 per barrel on Monday, while European natural gas prices jumped more than 40%. The spike followed attacks on key energy facilities, including Saudi Arabia’s Ras Tanura refinery and a Qatari LNG plant, which triggered production shutdowns.
Iran has warned that tankers moving through the Strait of Hormuz would face attacks, amounting to a near closure.
While some believe that Iran may struggle to sustain prolonged military escalation and that transit disruptions through Hormuz could normalise quickly, uncertainty remains, with US president Donald Trump indicating the conflict could stretch up to four weeks.
Oil minister Hardeep Puri posted on X that the government is “continuously monitoring the evolving situation” and would take all necessary steps to ensure availability and affordability of key petroleum products.
The government is seriously considering curbs on the exports of petrol and diesel to prioritise domestic supply in an emergency.
According to officials, India currently exports about a third of its petrol output, roughly a quarter of diesel and nearly half of aviation turbine fuel (ATF). Refiners could also divert surplus ATF into other product streams if required, it has been said.
However, it is LPG that is of the greatest concern. India imports nearly two-thirds of its LPG consumption, with 85-90% sourced from the Gulf region. Inventory levels remain modest.
If fresh supplies get disrupted, existing stocks – including onshore inventories and cargoes that have already crossed the Strait – could cover less than two weeks of demand, experts believe.
State-run refiners Indian Oil, HPCL and BPCL have already begun increasing LPG output at select integrated petrochemical refineries, it has been reported.
It has also been reported that officials are discussing targeted demand-management measures, including rationing LPG for households that have access to alternative fuels, particularly in rural areas.
India’s crude oil reserves can cover roughly 17-18 days of consumption, while petrol and diesel stocks provide about 20-21 days of cover. LNG inventories are estimated to last 10-12 days. Without new arrivals via Hormuz, these buffers would gradually erode. The Gulf has accounted for about half of India’s crude and LNG imports in recent months.
The government is also looking at the option of boosting imports of Russian crude. Significant volumes of Russian oil remain at sea and could be redirected relatively quickly to India, it has been reported.
