India Raises Cooking Gas Prices as Iran War Hits Supply — Everything Indian Households Must Know

The war raging thousands of kilometres away in Iran has arrived directly at the doorstep of Indian households. Effective Saturday, March 7, 2026, India's oil marketing companies raised the price of the widely used 14.2-kg domestic LPG cylinder by ₹60 — the first such hike in nearly a year — as the US-Israel war on Iran disrupts critical Middle East energy supply routes. For millions of Indian families who rely on cooking gas every single day, this is the first and most direct economic blow of a conflict that began thousands of miles away.

What Are the New LPG Prices Across India?

Indian Oil Corp., the nation's largest refiner, increased the price of a 14.2-kilogram liquefied petroleum gas cylinder in New Delhi by 7% to ₹913 rupees ($9.95), according to its website. Other state-run retailers — Bharat Petroleum Corp. and Hindustan Petroleum Corp. — moved in tandem, marking the first hike for household consumers since April.

Similar price hikes have been reported in other major cities. In Mumbai, the price of a domestic LPG cylinder has reached ₹912.50. In Kolkata, the cylinder now costs ₹939, while in Chennai the revised price stands at ₹928.50. In Hyderabad, the 14.2 kg cylinder now costs ₹960, up from ₹905 previously.

Indian companies have also raised the prices of 19-kg commercial LPG cylinders — mainly used by hotels and restaurants — to ₹1,883 from ₹1,768.50. As The Week reported, this follows an earlier ₹28 increase on March 1, taking the total commercial LPG hike in 2026 alone to ₹302.50.

Why Has India Raised LPG Prices Now?

India, the world's second-biggest importer of LPG, last year consumed 33.15 million metric tons of cooking gas — a mixture of propane and butane — with imports accounting for about two-thirds of LPG consumption. Middle Eastern LPG accounts for 85% to 90% of those imports.

The trigger is the US-Israel military strikes on Iran, which have severely disrupted energy flows through the Strait of Hormuz — the narrow waterway through which the vast majority of India's imported LPG must pass. The conflict triggered a retaliation from Iran, effectively disrupting traffic through the Strait. Adding to the shock, Qatar — the world's second-largest LNG producer — suspended production on March 2 after Iranian drone attacks on its industrial facilities, an event S&P Global described as one that risks "massively tightening the intensely global market."

For more on how the Strait of Hormuz disruption is rippling across global energy markets, Bloomberg Energy and Reuters Commodities are tracking developments in real time.

India's Dangerous Import Dependency: The Numbers Behind the Crisis

What makes India particularly vulnerable to this supply shock is the extraordinary concentration of its LPG import sources. According to a report released by commodity market intelligence firm Argus, nearly 90% of 2025 LPG imports came from Middle East suppliers despite an increase in US supplies. India imports approximately 80–85% of the LPG it consumes, and shipments from Qatar, UAE, Saudi Arabia, and Kuwait all pass through the Strait of Hormuz.

India imports over 88% of its crude oil and has a higher dependence on the Strait for LPG and LNG than for crude oil, making those supply chains more vulnerable to the ongoing disruption. To make matters worse, unlike crude oil, India maintains no comparable strategic reserve for LPG — meaning that a prolonged disruption can be far more immediately damaging to domestic supply chains.

The International Energy Agency (IEA) has consistently flagged India's LPG import dependency as a structural vulnerability in its annual energy security reviews — a warning that is now playing out in real time at kitchen tables across the country.

Global LPG Benchmarks Surge: The Data Behind the Price Hike

The ₹60 hike is directly tied to a dramatic surge in global LPG benchmark prices. The Argus Far East Index propane swap — one of the global LPG benchmarks that determines India's import costs — hit $611 per tonne in late February, sharply up from $566.5 per tonne just days before.

Europe's key pricing reference, the Dutch TTF gas benchmark, surged 76% in one week, while the Japan-Korea Marker (JKM) for Asian LNG deliveries hit a year-high. India's domestic LPG prices are linked to Saudi Aramco's Contract Price — which in turn is closely correlated to these global benchmarks — meaning every spike in international LPG markets flows directly into what Indian consumers pay for their cooking gas cylinders. More on Saudi Aramco's pricing mechanism is available through Saudi Aramco's official reports portal.

Government Response: Boosting Domestic Production and US Imports

The Indian government has moved quickly to try to contain the fallout. India on Friday asked refiners to boost LPG production to avoid any shortage of cooking gas in the country.

On the import diversification front, 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 — a strategic move to reduce dependence on Middle Eastern supplies. However, analysts caution that US LPG takes significantly longer to reach India than Gulf shipments, and the logistics infrastructure for large-scale US-to-India LPG flows is not yet fully in place.

For now, the government has reassured that India has adequate fuel reserves and is monitoring the situation closely to ensure supply stability. The Petroleum Planning and Analysis Cell (PPAC) — the nodal body under India's Ministry of Petroleum — is continuously monitoring LPG supply chains and import logistics throughout the crisis.

Who Is Protected? The Ujjwala Yojana Shield

A critical reassurance for India's most economically vulnerable households is that subsidised LPG connections remain protected. The government has clarified that subsidised LPG connections under schemes such as Pradhan Mantri Ujjwala Yojana remain protected, ensuring that poorer households continue receiving financial support for cooking fuel.

The Pradhan Mantri Ujjwala Yojana scheme — which provides subsidised LPG connections to over 103 million women from below-poverty-line households across India — is administered by the Ministry of Petroleum and Natural Gas and is considered one of India's most impactful social welfare programmes. The government's decision to ring-fence Ujjwala beneficiaries from the hike is a politically and socially important safeguard during this period of energy price volatility.

Will LPG Prices Cross ₹1,000 Per Cylinder?

The ₹60 hike delivered on March 7 may not be the last. If the conflict raging in the 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.

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.

For context, this would push Delhi LPG prices to between ₹993 and ₹1,033 per cylinder — a level not seen in Indian households since the peak energy crisis of 2022–23. The broader macro implications of a $100+ oil scenario are being tracked closely by The Economic Times Energy Desk and Business Standard.

Is Petrol and Diesel Next?

The LPG hike has triggered a bigger question that millions of Indian consumers and businesses are asking: will petrol and diesel prices follow?

Experts warn that if tensions continue and supply disruptions worsen, the impact may not be limited to LPG alone. Petrol and diesel prices could also rise in the near future if global crude oil prices climb further due to the ongoing situation involving Iran and other countries in the region.

With cooking gas becoming costlier and global oil markets under pressure, experts warn that the coming weeks will be crucial in determining whether other fuel prices in India also move upward. India's petrol and diesel prices are currently held by the government through price regulation of oil marketing companies — but sustained crude at $90–100+ per barrel would significantly erode the subsidy buffer, making a petrol and diesel hike increasingly difficult to avoid.

The World Bank's Energy Sector team has previously noted that India's fiscal exposure to global oil prices is among the highest of any major emerging market economy — a structural vulnerability that becomes acutely relevant in a crisis environment like the present one.

Impact on Households and Small Businesses

For everyday Indian families and small businesses, the real-world impact of the LPG hike is immediate and tangible.

• Households: A ₹60 increase per cylinder translates to an additional ₹720 per year for a family consuming one cylinder per month — a meaningful burden for middle-income and lower-income households already managing rising food and transportation costs.
• Hotels and Restaurants: The 19-kg commercial LPG cylinder used by hotels and restaurants went up by ₹114.50 to ₹1,883 in Delhi — with the total commercial LPG hike in 2026 now at ₹302.50, squeezing already thin margins in the food services sector.
• Street Food Vendors: Millions of street food vendors and dhabas across India — who depend entirely on commercial LPG cylinders — face the sharpest proportional cost increase, with limited ability to pass costs on to customers without losing business.

City-Wise New LPG Prices at a Glance

• Delhi: ₹913 (up from ₹853)
• Mumbai: ₹912.50
• Kolkata: ₹939
• Chennai: ₹928.50
• Hyderabad: ₹960 (up from ₹905)
• Commercial LPG (19 kg, Delhi): ₹1,883 (up from ₹1,768.50)

Key Facts at a Glance

• Effective Date of Hike: March 7, 2026
• Domestic LPG Hike: ₹60 per 14.2-kg cylinder
• Commercial LPG Hike: ~₹115 per 19-kg cylinder
• Last Domestic Hike: April 2025 (₹50 increase)
• India LPG Consumption (2025): 33.15 million metric tonnes
• Middle East Share of India's LPG Imports: 85–90%
• India's LPG Import Dependency: ~80–85% of total consumption
• Argus FEI Propane Swap: $611 per tonne (up from $566.5)
• Dutch TTF Benchmark Surge: +76% in one week
• Potential Further Hike (Wood Mackenzie): ₹80–120 per cylinder if oil crosses $100/barrel
• US LPG Contract: 2.2 million tonnes per annum secured
• Ujjwala Yojana Beneficiaries Protected: Yes — subsidised connections unaffected

Conclusion

The ₹60 LPG price hike of March 7, 2026 is more than just a routine fuel price revision — it is the first direct economic consequence of the US-Iran war landing in Indian homes. With 85–90% of India's LPG imports sourced from the Middle East, all passing through the increasingly threatened Strait of Hormuz, India's cooking gas supply chain is uniquely exposed to this geopolitical crisis.

The government has moved to boost domestic production, secure US LPG supplies, and protect Ujjwala Yojana beneficiaries — but analysts are clear that if the conflict deepens, prices could cross ₹1,000 per cylinder before the financial year ends. And with petrol and diesel price hikes now also under discussion, the full economic impact of the Iran war on Indian households may still be in its early stages.

For the latest updates on LPG prices, fuel costs, and India's energy security, follow The Economic Times Energy, Business Standard, and Reuters India for real-time coverage as this situation develops.