International crude oil prices have surged beyond $100 per barrel due to the ongoing conflict in West Asia. As a result, commercial users of cooking gas or LPG are gradually facing supply shortages in major cities such as Mumbai, Chennai, Hyderabad, and Bengaluru. At the same time, industrial users of LNG and propane-LPG, including tile and ceramic manufacturers in Morbi, Gujarat, are also experiencing disruptions.
Government Prioritizes Domestic LPG Supply
To manage the situation, the government has directed refiners and fuel retailers to prioritize LPG supply for household consumers over commercial users. Consequently, supply tightness has emerged in several regions. In addition, the Petroleum and Natural Gas Ministry has stated that imported LPG supplies are being allocated first to essential sectors such as hospitals and educational institutions.
To prevent hoarding and black marketing, authorities have also increased the minimum waiting period for booking LPG cylinders from 21 to 25 days. Furthermore, the government has established a committee comprising three executive directors from oil marketing companies to review LPG supply concerns raised by restaurants, hotels, and industrial users.
Government Maintains Stable Petrol and Diesel Prices
Despite crude oil prices climbing to levels not seen in over three years, officials have indicated that the government does not plan to increase petrol and diesel prices at present. This approach aligns with its policy of keeping retail fuel prices stable despite volatility in global energy markets.
India’s fuel retail sector remains dominated by state-owned companies—Indian Oil, BPCL, and HPCL—which together control more than 90 percent of the market. Meanwhile, the government has invoked emergency powers under the Essential Commodities Act to ensure refiners maximize LPG production and prioritize domestic consumers.
Industry and Hospitality Sector Feel the Impact
As reported by The Indian Express, the gas shortage has hit industries and restaurants particularly hard. In Morbi, Gujarat, nearly 150 of the region’s 650 ceramic units have already shut down due to fuel supply issues. Industry representatives note that a large portion of imported propane normally arrives from Qatar through the Strait of Hormuz, which currently faces disruptions.
Similarly, restaurant associations in cities like Mumbai, Bengaluru, and Hyderabad report increasing LPG shortages and rising black-market prices for commercial cylinders.
Markets React as Oil Prices Surge
The surge in crude prices also affected financial markets. Benchmark stock indices dropped nearly three percent in early trading before recovering slightly by the end of the day. Meanwhile, the Indian rupee weakened to a record low against the US dollar, reflecting concerns about rising energy costs and their broader economic impact.
