LPG Policy & Research Division

Research Report

Title: Impact of Rising LPG (Cooking Gas) Prices and Supply Risks in India
Prepared for: Helpful Foundation – Legal & Social Support Initiative
Date: March 2026

1. Executive Summary

Recent increases in Liquefied Petroleum Gas (LPG) prices in India have raised public concern regarding both affordability and supply stability. The primary drivers behind the price increase include global geopolitical tensions in the Middle East, rising international energy prices, and India’s significant dependence on imported LPG.

India imports a substantial portion of its LPG from West Asian countries. Any disruption in international shipping routes or production in these regions can have immediate consequences for domestic fuel prices and supply chains.

Although price increases have been observed nationwide, the Government of India has stated that household LPG supply remains stable, and emergency measures have been implemented to maintain adequate availability. However, some localized shortages of commercial LPG cylinders have been reported in major urban markets.

For civil society organizations such as Helpful Foundation, understanding these developments is important because rising cooking fuel prices directly affect low-income households, informal workers, and small food vendors.

2. Background: LPG Use in India

Liquefied Petroleum Gas (LPG) is one of the most widely used cooking fuels in India.

Key National Statistics

Over 300 million LPG connections have been issued in India.
LPG is the primary cooking fuel for the majority of urban households.
The Government’s Pradhan Mantri Ujjwala Yojana (PMUY) significantly expanded LPG access to rural and economically weaker households.

Because LPG is essential for household cooking, any price increase has direct social and economic implications, particularly for vulnerable populations.

3. Current LPG Price Situation (2026)

In early March 2026, the price of LPG cylinders increased across India.

Domestic LPG Cylinder (14.2 kg)

Average price after revision:

Delhi: approximately ₹913
Mumbai: approximately ₹912
Kolkata: approximately ₹939
Chennai: approximately ₹928

The price increase was approximately ₹60 per cylinder nationwide.

Commercial LPG Cylinder (19 kg)

Commercial LPG cylinders experienced a larger increase of approximately ₹110–₹115 per cylinder.

These cylinders are primarily used by:

Restaurants
Street food vendors
Hotels
Small catering businesses
Tea stalls and local eateries

4. India’s LPG Import Dependence

India relies heavily on imported LPG to meet domestic demand.

Import Dependence

Approximately 60–66% of LPG consumed in India is imported.
Most LPG imports originate from West Asian countries, including:
- Saudi Arabia
- Qatar
- United Arab Emirates
- Kuwait

Because of this dependence, international geopolitical events directly influence LPG prices in India.

5. Geopolitical Factors Affecting LPG Prices

The recent increase in LPG prices is closely linked to developments in global energy markets.

1. Middle East Geopolitical Tensions

Conflicts and strategic tensions in the Middle East have affected global oil and gas supply stability. These tensions increase uncertainty in international energy markets, causing fuel prices to rise globally.

2. Strategic Shipping Routes

A large portion of global oil and LPG shipments pass through the Strait of Hormuz, a narrow shipping route connecting the Persian Gulf to international markets.

Any disruption to this route can significantly impact:

Oil shipments
LNG shipments
LPG supply chains

India relies heavily on shipments that transit through this region.

3. Increased Global Energy Prices

When global crude oil prices increase, LPG prices typically follow similar upward trends because they are linked within the global energy market.

6. Supply Situation in India

Despite price increases, the Government of India has stated that domestic LPG supply remains largely stable.

However, the following developments have been reported:

Localized Commercial LPG Shortages

Some urban markets have experienced temporary shortages of commercial LPG cylinders, particularly in:

Delhi NCR region
Large metropolitan food markets
Restaurant supply chains

Black Market Concerns

In certain areas, commercial LPG cylinders have reportedly been sold at inflated prices in informal markets, indicating temporary distribution disruptions.

7. Government Response Measures

The Government of India and oil marketing companies have initiated several actions to stabilize supply.

Increased Domestic Production

Indian refineries have been instructed to increase LPG production levels to support domestic demand.

Prioritization of Household Supply

Domestic LPG cylinders used by households are being prioritized over commercial cylinders in order to ensure uninterrupted access for families.

Diversification of Import Sources

Authorities are also exploring alternative supply sources and shipping routes to reduce dependence on a single geographic region.

Public Advisory

Government agencies have advised citizens not to panic-book LPG cylinders, stating that supply chains remain operational.

8. Socio-Economic Impact

The rise in LPG prices can have several implications for different sectors of society.

Impact on Households

Increased monthly household expenditure
Greater burden on lower-income families
Possible return to traditional fuels such as wood or coal in rural areas if prices remain high

Impact on Informal Economy

Small businesses dependent on LPG may face increased operating costs, including:

Street vendors
Tea stall owners
Small restaurants
Catering services

These increased costs may eventually lead to higher food prices for consumers.

Inflationary Pressure

Fuel price increases can contribute to broader inflation in the economy, affecting transportation, food prices, and small businesses.

9. Key Findings

LPG prices increased nationwide in March 2026 by approximately ₹60 per domestic cylinder.
India imports roughly 60–66% of its LPG demand, creating vulnerability to international disruptions.
Geopolitical tensions in the Middle East and shipping risks in the Strait of Hormuz are major contributing factors.
Domestic household LPG supply remains largely stable, though commercial cylinder shortages have been reported in some regions.
Government authorities are increasing production and prioritizing household supply to stabilize the market.

10. Policy Recommendations for Civil Society Organizations

Organizations such as Helpful Foundation can play an important role in supporting communities during periods of fuel price volatility.

Suggested Actions

Public Awareness Campaigns
Educate citizens about LPG price changes and government subsidy programs.
Support for Vulnerable Households
Assist low-income families in accessing government schemes such as PMUY.
Monitoring Market Irregularities
Report black-market LPG sales or illegal pricing practices to authorities.
Advocacy for Consumer Protection
Advocate for transparent pricing policies and consumer safeguards.
Legal Assistance for Consumers
Provide legal guidance where consumers face fraud, overpricing, or illegal LPG supply practices.

11. Conclusion

The recent rise in LPG prices in India reflects the interconnected nature of global energy markets and domestic fuel supply systems. While the country currently maintains stable household LPG supply, continued geopolitical instability and import dependence could pose long-term risks.

Monitoring fuel affordability and supply stability is essential for protecting vulnerable communities. Civil society organizations like Helpful Foundation can contribute by raising awareness, providing legal support, and advocating for fair access to essential energy resources.

Prepared by:
Research & Policy Support Team
Helpful Foundation