Panic Buying Sweeps India As War Disrupts Cooking Gas Supplies

Long lines are forming outside cooking gas dealers across India as fears of shortages spread following disruptions to fuel imports linked to the war in the Middle East.

At a small distribution shop in Pune, gas dealer Vishal Vilas Mandhare has watched demand surge in recent days. Customers arrive carrying empty cylinders, pressing him and his staff for answers about when the next delivery of liquefied petroleum gas, or LPG, will arrive.

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

India depends heavily on LPG for everyday cooking, and millions of households rely on regular cylinder refills to prepare meals. But since hostilities in the Middle East began disrupting a major share of India’s fuel imports, panic buying has spread, straining the country’s vast distribution system.

India is the world’s second-largest consumer of LPG and imports about 90 percent of the fuel it uses. Shipments for the week beginning March 9 are estimated at about 270,000 tons, the lowest level since April 2023, according to data from the analytics firm Kpler. Supplies from the Middle East have been sharply curtailed after attacks on Iran by the United States and Israel led to the closure of the Strait of Hormuz, a critical route for energy shipments.

India’s LPG network includes roughly 26,000 distributors serving more than 333 million households. While many families receive subsidized cylinders through government programs, migrant workers and small businesses that rely on the open market have been particularly hard hit. As supplies tighten and authorities ration deliveries, informal distributors have begun charging higher prices.

The rush to secure cylinders has also strained booking systems. Indian Oil Corp.’s online reservation portal briefly crashed on Thursday amid the surge in demand, adding to delays and prompting complaints from customers.

Government officials say they are working to stabilize supplies. Oil Minister Hardeep Puri recently told Parliament that India is seeking additional LPG cargoes from countries including the United States, Norway, Canada, Algeria and Russia. Authorities are also in discussions with Iran to ensure safe passage for shipments headed to India.

Domestic refiners have been ordered to increase output, raising local LPG production by 28 percent, Mr. Puri said. The government has also raised retail LPG prices for the first time in a year in an effort to moderate demand.

State-run companies say the national distribution network continues to function, though demand has surged in some areas. “The network remains stable and adequate,” a spokesman for Bharat Petroleum Corp. said, adding that distributors in some regions were seeing unusually high bookings driven by precautionary purchases.

“There is no shortage of gas anywhere. Consumers will continue to receive LPG cylinders at the prescribed price. Both gas agencies and the public must avoid unnecessary hoarding,” said District Magistrate VK Singh. 

Yet, there is definitely a shortage of commercial LPG cylinders. 

In Prayagraj, several hotel and restaurant operators claim commercial cylinders are being sold for ₹2,500– ₹2,600 in the open market.

A dhaba owner in George Town said he called the delivery worker of his gas agency on Tuesday morning to request a commercial cylinder. The worker allegedly said it could be arranged for ₹2,500. “I urgently needed it for my business, so I agreed,” he said. -Hindustan Times

For dealers like Mr. Mandhare, the current rush has echoes of past crises. During the Covid-19 pandemic, many faced similar scenes of anxious customers lining up for essentials. “We know how to handle upset and panicked customers,” he said. “This is nothing we can’t handle.”