LPG consumption in the country declined by 17.7 per cent in the first fortnight of March due to supply disruptions caused by the war in the Middle East. This information was obtained from preliminary industry data. According to the data, LPG consumption in the country declined to 11.47 lakh tonnes by March 15, which is 17.3 per cent lower than 13.87 lakh tonnes in the first 15 days of March last year. This is 26.3 per cent less than the demand of 15.57 lakh tonnes in the first 15 days of February this year. India imports about 60 per cent of its total LPG requirement, most of which comes through the Strait of Hormuz, controlled by Iran.ย
Closure of the Strait of Hormuz disrupted supplies
Iran closed the Strait of Hormuz after the US and Israel attacked Iran. Due to disruptions in supplies from Saudi Arabia and the United Arab Emirates, the government has cut LPG supplies to commercial establishments such as hotels and industries to ensure the availability of domestic cooking gas. According to preliminary sales data from three public sector oil companies, LPG consumption during March 1-15 was 16 per cent lower than the same period in 2024 and 10.6 per cent lower than the same period in 2023.ย
Steady increase in LPG consumption
Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Bharat Petroleum Corporation Ltd. hold about 90 per cent of the market. LPG consumption has seen steady annual growth of 3 to 4 per cent over the past few years, driven by the government’s push to replace wood and other polluting fuels with cleaner-burning fuels.
ATF consumption also falls
Due to the war, Gulf countries closed their airspace, impacting flight operations. Airlines operated significantly fewer flights during this period, impacting aviation turbine fuel (ATF) consumption. ATF consumption declined by 4 per cent to 327,900 tons in the first 15 days of March, a decrease from the same period last year. On a monthly basis, it declined by 12.3 per cent. Apart from these two war-affected fuels, petrol and diesel saw a significant increase in demand. Petrol sales increased by 13.2 per cent to approximately 1.5 million tons, while diesel consumption increased by 8.2 per cent to 3.384 million tons.