India’s LPG imports dropped 45% in Q1 FY27 to an eight-year low of 2.85 million tonnes due to shipping disruptions at the Strait of Hormuz. With traditional Middle Eastern supplies constrained, India has shifted toward U.S. imports, which may increase total energy costs for consumers and businesses.
Detailed Coverage
India’s liquefied petroleum gas (LPG) imports saw a sharp decline during the April-June quarter of fiscal year 2027, reaching their lowest level in eight years. According to data from the Petroleum Planning & Analysis Cell (PPAC), the country imported approximately 2.85 million tonnes during the quarter, representing a 45% decrease compared to the same period in the previous year.
Impact of Shipping Disruptions
The primary driver for this reduction is the ongoing disruption in the Strait of Hormuz. As a nation that imports roughly 60% of its total LPG requirements, India relies heavily on Middle Eastern producers for about 90% of its supplies. Most of these shipments typically pass through this critical waterway. When supply lines were restricted, monthly import volumes dropped from over 2 million tonnes in early 2026 to between 1 million and 1.2 million tonnes throughout the March-to-May period.
Shift in Global Sourcing
To manage the supply shortfall, India has rapidly pivoted its procurement strategy. While the U.S. was previously India’s fifth-largest LPG supplier as recently as January 2026, it became the primary source by March 2026. This realignment was necessary after imports from the Middle East saw an approximate 85% decline between February and June 2026, based on data reported by industry tracking firms.
While this diversification reduces dependence on a single region, it brings long-term economic implications. Energy analysts note that while U.S. supplies provide a necessary alternative, the distance is significantly greater than the routes from the Gulf. This change in logistics results in longer freight times, which is likely to increase the total delivered cost of the fuel.
Domestic Consumption and Future Outlook
The reduction in available supply has also forced a change in domestic consumption patterns. Estimates indicate a 32% drop in LPG usage from February levels, impacting both household cooking and commercial businesses that rely on the fuel.
For investors, the key monitorable remains the stability of these international shipping routes and the subsequent impact on the profit margins of oil marketing companies. These companies often absorb cost fluctuations to maintain stable retail prices. Investors should track future fuel pricing updates and potential government policy changes regarding energy subsidies as the sector adjusts to these higher landed costs and a modified global supply chain.