India Sees Rise in Fuel Demand While LPG Supply Faces Pressure

India’s total fuel consumption rose to 21.37 million tons last month, marking its highest level since December 2025 and showing a clear increase from February’s 20.19 million tons, as per recent government data.

In contrast, liquefied petroleum gas (LPG) demand witnessed a decline, largely due to supply disruptions linked to the Strait of Hormuz situation. India, being one of the world’s top LPG consumers, relies heavily on Middle Eastern imports, which account for a major share of its supply.

With availability tightening, the government has taken steps to prioritize household consumption by reducing LPG allocation to commercial and industrial users. At the same time, efforts are being accelerated to expand city gas pipeline networks as an alternative to cylinder-based usage.

There have been some positive developments, as a few LPG shipments were recently allowed to pass through the Hormuz route following discussions between India and Iran. However, crude oil inflows from the Middle East have declined significantly, impacting economic outlooks and prompting downward revisions in growth expectations.

To manage the situation, Indian refiners have increased purchases of Russian crude, with imports rising sharply in March. Despite this shift, overall crude imports fell notably during the month due to ongoing disruptions in key shipping routes.

The mixed trend highlights strong fuel demand in the country, even as supply-side challenges continue to affect key energy segments like LPG.

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