Rising tensions in the Middle East have triggered a fuel scarcity in India, with domestic LPG deliveries falling by 18% in February and prices surging 12% month-on-month. The disruption threatens energy security for millions and could fuel inflation across the household sector.
- LPG cylinder deliveries in India dropped 18% in February 2026 year-on-year
- Domestic LPG prices rose 12% in February, accelerating inflationary pressures
- India imports 85% of its crude oil and 40% of its LPG from the Middle East
- Crude oil futures (CL=F) surged 6.2% in two weeks due to supply fears
- Asia natural gas prices (NG=F) jumped 9.1% amid logistics disruptions
- The VIX rose to 28.4, signaling elevated investor uncertainty
A growing fuel crunch is affecting Indian households as geopolitical tensions in the Middle East disrupt critical energy supply routes. According to recent industry data, domestic LPG cylinder deliveries in India declined by 18% in February 2026 compared to the same period last year, with regional distribution centers in West Bengal and Uttar Pradesh reporting supply delays exceeding 48 hours. The crisis stems from increased shipping risks in the Strait of Hormuz, where Iranian-backed Houthi forces have intensified attacks on commercial vessels, disrupting tanker traffic from the Persian Gulf to South Asia. The disruption has triggered a sharp rise in LPG prices, which climbed 12% in February on average—outpacing inflation and affecting low- and middle-income households most severely. With India importing over 85% of its crude oil and 40% of its LPG from the Middle East, any prolonged supply interruption could strain the nation’s foreign exchange reserves and amplify import dependency risks. The Indian government has activated emergency fuel reserves, but officials warn that sustained pressure may lead to rationing in urban and semi-urban areas by mid-March. Global energy markets reacted swiftly. Crude oil futures (CL=F) rose 6.2% over the past two weeks, while natural gas benchmarks (NG=F) in Asia climbed 9.1% amid fears of reduced supply volumes. The CBOE Volatility Index (^VIX) spiked to 28.4, reflecting heightened market anxiety over energy security and potential secondary inflationary effects. Energy analysts caution that if the crisis continues beyond April, diesel shortages in transportation sectors could follow, further impacting food and goods distribution.