LPG Price Hiked by Rs 60 as Iran-Israel War Hits India's Gas Supply Chain

The ripple effects of the Iran-Israel war have reached Indian households, with the central government hiking the price of domestic LPG cylinders by Rs 60 and commercial 19-kg cylinders by Rs 115, effective today. The new prices come as India grapples with a potential energy supply crisis triggered by the near-closure of the Strait of Hormuz and Iran's drone attacks on Gulf energy infrastructure.

In Delhi, the price of a 14.2-kg domestic gas cylinder has risen from Rs 853 to Rs 913. The 19-kg commercial cylinder now costs Rs 1,883, up from Rs 1,768. The government has simultaneously invoked emergency powers under the Essential Commodities Act (ESMA) 1955, directing all state-owned oil companies to divert propane and butane exclusively to LPG production — a move that could squeeze margins for private petrochemical firms including Reliance Industries.

The core of India's energy anxiety lies in the 167-kilometre Strait of Hormuz, which has become effectively impassable for oil tankers due to the ongoing conflict. India relies on this critical waterway for approximately 50 percent of its crude oil imports and 54 percent of its LNG requirements — sourced from Qatar, Kuwait, and Iraq. With no tankers willing to risk the route, the threat to India's energy security is acute and immediate.

Iran's drone strikes last week on US bases and port infrastructure in the UAE, Qatar, and Saudi Arabia delivered a further blow, prompting Qatar — India's single largest LNG supplier, accounting for 40 percent of India's annual LNG imports of approximately 27 million tonnes — to halt production at its LNG plant.

Despite the severity of the situation, the government has urged citizens not to panic. Officials pointed out that India now sources approximately 20 percent of its crude oil from Russia — reducing its dependence on the Hormuz route — and that current domestic petroleum and LPG stocks remain adequate. Reports of refinery closures, officials said, are unfounded rumours.

The emergency refinery directive, however, signals that the government is not taking the supply risk lightly, and further price adjustments cannot be ruled out if the Gulf crisis deepens.