The ₹60 hike that landed on your cooking gas cylinder this morning may not be the last. If the conflict raging in Middle East deepens, energy analysts across the board warn that Indian households could be looking at further increases, and possibly a domestic LPG price that crosses ₹1,000 per cylinder before the financial year ends.
According to a report released by commodity market intelligence thinktank Argus, nearly 90 per cent of 2025 LPG imports came from Middle East suppliers despite an increase in US supplies.
India imports approximately 80–85 per cent of the LPG it consumes, and shipments from Qatar, UAE, Saudi Arabia and Kuwait, all pass through the Strait of Hormuz. At least, it did, till Iran moved to restrict following the US-Israel strikes
And unlike crude oil, India maintains no comparable strategic reserve for LPG. This is why market analysts say that a prolonged disruption can be costly.
The Argus Far East Index propane swap, one of the global LPG benchmarks that hints at India's import costs, hit $611 per tonne in late February, sharply up from $566.5 per tonne just days before.
If the conflict escalates and the Strait closure extends over weeks or months, energy analysts at Wood Mackenzie warn that oil prices could go well above $100 per barrel. At that level, India's domestic LPG prices, which are linked to Saudi Aramco’s Contract Price, could see an additional hike of ₹80–120 per cylinder on top of today's hike.
Government to step in?
One of the ways the Indian government has reportedly stepped in is by contracting 2.2 million tonnes per annum of LPG from the US Gulf Coast. This is estimated to cover about 10 per cent of annual needs. And Ujjwala Yojana's 10 crore beneficiaries might retain their ₹300 subsidy per cylinder for up to 12 refills.
But with US President Donald Trump publicly ruling out any deal with Iran short of "unconditional surrender", a swift diplomatic resolution looks distant, and the pressure on India's gas prices is unlikely to ease any time soon.
