‘An Alarming State of Affairs’: Conflict on Iran Squeezes India's LPG Stock.

The ripple effects of a military engagement being fought nearly 3,000km away are now impacting India's homes.

As aerial attacks on Iran hinder energy shipments through the key maritime chokepoint, stocks of liquefied petroleum gas (LPG) are tightening across India, compelling restaurants to reduce offerings, reduce operating times and in some cases cease operations entirely.

Social media is awash with video clips showing lines outside fuel suppliers across Indian urban and rural areas as worries over fuel supplies grow. Restaurant kitchens appear the most affected: the biggest crunch is in restaurant kitchens.

"The state of affairs is alarming. LPG simply is unavailable," says a official of the an industry group.

Most restaurants run either on business-grade gas tanks or direct gas lines, and the lack of supply are now being noticed across the country. "Numerous restaurants have ceased operations - some in northern India, many in the southern states. People are adopting coal and wood and induction stoves to keep their operations going."

Regional Impact

In Mumbai, local news say up to a 20% of hotels and restaurants are already operating at reduced capacity as cylinder availability dwindle. In the southern cities of tech and coastal hubs, some establishments say their gas stocks have dwindled with little backup. "We can only make coffee and no other dishes - it is nothing less than pathetic. Businesses are going to suffer," says a restaurant owner in Bengaluru.

Restaurant managers are seeking alternatives. "Offering lists are shrinking, some are opening only for dinner and opening only for dinner," an industry representative says, adding that shutdowns are varying as supplies wax and wane. "Three restaurants in Delhi were shut yesterday - some have resumed operations. It's a fluid situation."

Retailers note a surge in sales of electronic cooking appliances, with some saying they are facing stockouts.

Authority's View

Yet, the government insists there is adequate supply.

India has more than 30 crore home fuel subscribers and spokespersons say cylinders are being reallocated to households as conflict-related stress from the war in the Gulf affect energy markets.

About 60% of India's LPG is imported, and about nine out of ten of those imports pass through the key maritime route, the strategic bottleneck now largely blocked by the war.

The petroleum ministry says that it instructed refineries to boost LPG output for home needs, raising domestic production by about a quarter. Business-grade fuel is being reserved for vital industries such as medical and academic centers, while distribution will be "fair and transparent".

"Unnecessary hoarding and stockpiling has been caused by misinformation. The standard supply timeline for domestic LPG remains about 60 hours," says a government spokesperson.

Widening Concern

Now the concern is spreading beyond kitchens. On online networks, a widely shared video from Chennai shows a lengthy, winding line of motorbikes outside a fuel station. "Concern is genuine," the caption reads.

According to data from market experts, concerns about India's broader energy security may be exaggerated.

India imports the overwhelming majority of its oil. Around half of its crude oil imports - about 2.5 to 2.7 million barrels a day - travel through the passage, largely from Gulf countries.

Even if petroleum transit through the Strait of Hormuz are disrupted, the deficit could be partly offset by higher imports of Russian petroleum, according to a sector expert.

Based on shipping data and industry information, incremental Russian crude imports could reach around a significant volume of barrels a day, lessening India's effective deficit from exposure to the Strait of Hormuz to about a substantial volume of barrels a day.

"A large quantity of Russian oil barrels are currently in transit at sea in the Indian Ocean and, with only two major Asian economies as major buyers, those barrels remain a available backup," an analyst noted.

Kitchen Fuel: The Primary Concern

The primary concern is LPG, analysts say.

India consumes roughly 1 million barrels a day, but produces only 40-45% domestically, importing the rest - the vast majority through the Strait.

Refineries can adjust processes to extract a bit more LPG, but even a 10-20% boost would only lift domestic supply to about 47-50% of demand, leaving the country heavily reliant on imports.

In short: "Crude supply risk can be moderately reduced through diversification. Processed petroleum stocks remains largely sufficient. Kitchen fuel stocks is the critical issue to watch in the coming weeks."

What may be intensifying the concern on the ground is not just scarcity but uneven distribution - and the usual problem of hoarding.

An industry representative alleges exploitative practices.

"Distributors are taking advantage of the situation - black-marketing cylinders and selling them at a premium. In one small town, I heard of cylinders being hoarded and sold at a premium."

For now, India's energy imports may be cushioned by international market dynamics. But in kitchens across the country, the more pressing concern is simple: how to get the next refill.