West Asia Conflict Puts Pressure on India’s LPG and LNG Supply

The ongoing tensions in West Asia have increased concerns over India’s supply of cooking gas and natural gas, particularly Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG), both of which are crucial for household and industrial consumption.

Rising LPG Consumption in India

LPG is the primary cooking fuel in Indian households. However, India remains heavily dependent on imports, with around 60% of its LPG requirement sourced from abroad. Much of these imports come from Persian Gulf countries such as Saudi Arabia and Qatar.

LPG mainly consists of propane and butane gases, along with small quantities of other hydrocarbons. These gases occur naturally with Natural Gas (primarily methane) and are also produced during crude oil refining and petrochemical processing.

To manage supply concerns, the government has directed domestic refineries to increase propane–butane output from crude oil processing. Public sector oil companies such as Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) together produce about 40% of India’s LPG requirement, which is then bottled and distributed across the country.

LNG and Natural Gas Supply

India also relies heavily on LNG imports to meet its natural gas demand. LNG is produced by cooling methane to around –160°C, turning it into a liquid that can be transported in specialized ships.

• About half of India’s natural gas demand is met through domestic production, while the other half is imported as LNG.
• Qatar alone supplies around half of India’s LNG imports, mostly under long-term contracts.

Once imported, LNG is stored in cryogenic tanks at LNG terminals in Indian ports, then regasified into natural gas and transported through pipelines to consumers.

Uses of Natural Gas in India

Natural gas is vital for several sectors in India:

• Fertiliser production (used to produce ammonia)
• Power generation
• City Gas Distribution (CGD) networks for cooking and vehicles
• Refineries and other industrial processes

Source: TH