Crowds besiege India’s LPG dealers as war crimps supply

The country’s 26,000 distributors serve over 333 million households

Gas dealer Vishal Vilas Mandhare stares at the snaking queue outside his shop in Pune, which served just 20 people a day before the Iran war. Carrying empty cylinders, clients pepper him and his staff with questions about the looming shortages of India’s cooking fuel of choice.

“The dealers are facing as much trouble as the customers,” he says wearily, “just a different kind.”

Since hostilities broke out in the Middle East, disrupting a large share of India’s total fuel imports, panic purchases of liquefied petroleum gas skyrocketed. As the distribution system struggles to cope, millions of Indians who rely on LPG to put food on the table are feeling the pinch.

The country’s 26,000 distributors serve over 333 million households. Migrant workers and small businesses who are not registered under the government’s distribution system, and have to seek refills on the open market, are among the worst hit. As authorities ration supplies, informal distributors can now name their price.

India, the world’s second-largest LPG consumer, relies on imports for about 90% of its needs. Shipments in the week starting March 9 are estimated at 270,000 tons, the lowest since April 2023, according to Kpler data. Flows from the Middle East have been all but halted after US and Israeli attacks on Iran led to the closure of the Strait of Hormuz, a key transit route.

The government has made it a priority to shield households from fuel shortages. But this week’s buying rush has fractured delivery networks, leading to longer waits and suspicion that cylinders are being diverted to the black market. Indian Oil Corp.’s booking website briefly crashed Thursday, worsening the backlog and triggering fresh complaints online.

Indian Oil didn’t immediately reply to an email seeking comment.

Oil Minister Hardeep Puri recently told Parliament that the government is seeking additional cargoes from the US, Norway, Canada, Algeria and Russia, and is in talks with Iran to ensure safe passage for vessels bound for India. Refiners have been ordered to maximize output, lifting domestic LPG production by 28%, he said. Retail prices were also raised for the first time in a year to tame demand.

The network managed by state-run Bharat Petroleum Corp Ltd’s “remains stable and adequate,” a company spokesman said. “However, in some areas, distributors are experiencing higher-than-usual bookings due to precautionary demand.”

As overwhelming as it is, the situation is not entirely unfamiliar, according to Mandhare. After the Covid crisis he and his team are accustomed to managing anxious clients: “We know how to handle upset and panicked customers, so this is nothing we can’t handle.”