West Asia Conflict: LPG Usage at 21-Month Low in March

Why It Matters

The sharp drop in LPG imports highlights India’s vulnerability to geopolitical chokepoints, while record diesel and petrol sales signal consumer anxiety that could strain fuel logistics and pricing. Policymakers may need to accelerate alternative gas infrastructure to mitigate future supply shocks.

Key Takeaways

• LPG consumption fell 15.7% to 2.38 mt in March
• Diesel use hit record 8.73 mt, up 14% MoM
• Petrol consumption rose to 3.78 mt, 12% MoM
• LPG imports dropped to 1.1 mt from 2 mt in February
• India prioritises household LPG, pushes piped natural gas to 600k consumers

Pulse Analysis

The March dip in India’s LPG usage underscores how tightly the country’s energy supply chain is linked to the geopolitics of the Middle East. Roughly 60% of India’s LPG imports pass through the Strait of Hormuz, and the closure of this narrow waterway in late February cut daily arrivals from about 54,000 tonnes to 30,000 tonnes. The resulting import shortfall forced the Petroleum Planning and Analysis Cell to report a 15.7% month‑on‑month decline, the steepest drop since June 2024, and pushed the government to flag LPG as a critical pressure point.

Domestically, the supply uncertainty sparked a wave of panic buying that sent diesel and petrol consumption to all‑time highs. Diesel demand rose 14% month‑on‑month to 8.73 million tonnes, while petrol climbed 12% to 3.78 million tonnes, both eclipsing the previous records set in May 2025. Retail outlets reported queues and heightened price sensitivity, even as officials reassured the public that overall fuel stocks remain ample. The surge reflects not only immediate consumer fear but also the broader elasticity of India’s transport sector, which can quickly absorb additional fuel when confidence in supply wavers.

In response, the Indian government is fast‑tracking energy diversification. By prioritising household LPG allocations and accelerating piped natural gas (PNG) connections, officials aim to shift 600,000 new consumers onto a more secure domestic pipeline network by the end of April. This strategy reduces reliance on imported LPG and mitigates the impact of future maritime disruptions. Analysts view the PNG push as a long‑term hedge, potentially reshaping India’s energy mix and prompting further policy incentives for clean‑fuel adoption as the country seeks greater resilience against external shocks.