Documents show that India’s textile and handicraft sectors are experiencing immense pressure due to this natural gas scarcity. GAIL (India) Limited, the country’s leading gas distributor, has reportedly become heavily reliant on the spot market for gas purchases, which has resulted in increased production costs for manufacturers.

The government has attempted to address the issue by issuing a Natural Gas Control Order aimed at prioritizing key sectors. However, industrial buyers continue to face supply uncertainty and inflated prices. As sources indicate, natural gas consumption in India stands at approximately 189 million MMSCMD, with over half of this volume being imported.

Furthermore, the ongoing geopolitical tensions have severely disrupted gas supply to critical textile centers such as Surat and Ferozepur. This disruption has forced GAIL to pay premium prices ranging from $17-$20 MMBtu for urgent cargoes, significantly higher than the usual spot prices of $12-$15 MMBtu.

The current conflict has not only impacted natural gas supply but also disrupted global fuel trade routes, further complicating the situation for India’s industrial consumers. The government aims for an allocation stability target of 80% for industrial consumers; however, this still limits production capacity across various sectors.

Industry experts have raised concerns about the ramifications of these developments. One source remarked that “the high price burden indicates significant strain on energy-dependent sectors like textiles,” highlighting the broader implications for economic stability.

In light of these challenges, officials have emphasized that India must aggressively diversify its energy resources to mitigate future risks. As one analyst noted, “India needs to boldly diversify its energy resources.”

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The ongoing crisis in the Middle East raises the question: why are gas prices in India surging? The answer lies in supply disruptions caused by regional tensions, particularly affecting liquefied petroleum gas (LPG) and liquefied natural gas (LNG) supplies.

As of March 11, 2026, the price of a 14.2 kg non-subsidised LPG cylinder in Delhi has reached ₹913.00, following a ₹60 hike implemented on March 7. This increase is significant given that India imports around 60 percent of its total LPG demand, primarily from the Middle East.

The crisis has led to disruptions in shipments through the Strait of Hormuz, a crucial global energy transit corridor. This has tightened supplies, with heightened security risks affecting tanker movements. As a result, gas prices are expected to remain volatile.

Adani Total Gas, one of the major players in the market, has seen its shares jump by 13.08 percent due to a price hike for industrial clients. The company has increased gas prices in response to disruptions in LNG supply routes, further contributing to the rising costs.

Other gas-related stocks, such as Gujarat Gas, have also rallied sharply, with increases of up to 15 percent. This reflects investor confidence in the sector despite the challenges posed by the ongoing conflict in the Middle East.

The situation has been exacerbated by Qatar halting LNG production due to the conflict in West Asia, which has further strained supply chains. European natural gas prices surged nearly 40 percent last week, indicating a broader impact on global energy markets.

Domestic cooking gas prices have risen by ₹60 per cylinder, while commercial LPG prices have increased by ₹114.5. This trend highlights the interconnectedness of global energy markets and the direct impact of geopolitical events on local economies.

India’s reliance on imports for its energy needs underscores the vulnerability of its gas market to international disruptions. As the conflict continues, the long-term implications for gas prices in India remain uncertain.

In summary, the rise in gas prices in India is a direct consequence of the ongoing Middle East crisis, with significant implications for consumers and the energy market as a whole.

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On March 9, 2026, the Central Government of India took a significant step to regulate the supply of natural gas by issuing the Natural Gas (Supply Regulation) Order, 2026. This order was enacted under the Essential Commodities Act of 1955, aiming to address the challenges posed by ongoing disruptions in global fuel supply chains, particularly those stemming from the conflict in West Asia.

Context of the Regulation

The backdrop of this regulation is the ongoing conflict in West Asia, which has severely impacted liquefied natural gas (LNG) shipments through critical routes such as the Strait of Hormuz. As a result, suppliers have invoked force majeure, leading to a diversion of gas supplies to priority sectors. The Indian government has prioritized the supply of liquefied petroleum gas (LPG) for households to ensure energy security for its citizens amid this uncertainty in global oil and energy markets.

Priority Sectors Defined

The Natural Gas (Supply Regulation) Order categorizes consumers into four priority sectors. Priority Sector I includes domestic piped natural gas (PNG), compressed natural gas (CNG), LPG production, and essential pipeline operational needs, all of which will receive 100% of their average gas consumption. Priority Sector II, which encompasses fertilizer plants, will receive 70% of their average gas consumption, while Priority Sectors III and IV, which cover tea industries and other industrial consumers connected to the national gas grid and those supplied through City Gas Distribution (CGD) networks, will receive 80% of their average consumption.

Impact on Non-Priority Sectors

To meet the requirements of these priority sectors, gas supplies may be curtailed from non-priority sectors. This includes a directive for oil refineries to reduce their gas consumption to approximately 65% of their average over the past six months. Such measures are crucial to ensure that essential services and industries continue to operate effectively during these challenging times.

Management and Compliance

GAIL, one of India’s leading natural gas companies, has been tasked with managing the diversion and redistribution of natural gas under this new order. Furthermore, all entities involved in the natural gas sector are required to furnish detailed information regarding their production, imports, stocks, allocation, and consumption to the Petroleum Planning and Analysis Cell. This move is intended to enhance transparency and ensure that gas distribution aligns with the government’s regulatory framework.

Significance of the Regulation

The issuance of the Natural Gas (Supply Regulation) Order, 2026, is a critical response to the current global energy crisis exacerbated by the West Asia conflict. By prioritizing gas supply to essential sectors, the government aims to mitigate the adverse effects of supply disruptions and ensure that the most critical industries and consumers have access to the energy they need.

As the situation continues to evolve, the Indian government remains focused on ensuring equitable distribution of natural gas. The regulatory measures introduced are designed to address immediate challenges while laying the groundwork for a more resilient energy infrastructure in the future. Details remain unconfirmed regarding the long-term implications of these regulations, but their immediate impact on energy security is clear.

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Indian families face an acute cooking gas shortage due to the West Asia conflict disrupting supply chains. As the world’s second-largest buyer of liquefied petroleum gas (LPG), India sources over 90% of its supplies from the Middle East, making it particularly vulnerable to geopolitical tensions.

In the fiscal year 2024-25, India consumed 31.3 million tonnes of LPG but produced only 12.8 million tonnes domestically. This heavy reliance on imports has intensified concerns as the price of a 14.2kg domestic LPG cylinder increased by Rs 60, reaching Rs 913 in Delhi.

The Ministry of Petroleum and Natural Gas has ordered all refineries to maximize LPG production for household cooking, emphasizing that “33 crore active LPG connections at risk; domestic cooking trumps hotels per MoPNG emergency order.” This directive comes as public sector oil marketing companies (OMCs) have locked in 2.2 million tonnes of US Gulf Coast imports for 2026, which constitutes about 10% of India’s annual needs.

Approximately 54% of India’s total natural gas consumption is met through liquefied natural gas (LNG) imports. However, GAIL reported that its long-term supplier, Petronet LNG Limited, issued a force majeure notice, reducing LNG allocations to zero. GAIL is currently assessing the situation with respect to any supply curtailment that may need to be imposed on its downstream customers.

The crisis intensified last week when Qatar, one of India’s top-three suppliers of natural gas, saw QatarEnergy declare a production stoppage for LNG and associated products. This disruption raises questions about the long-term viability of production at current spot prices.

India’s heavy reliance on imports that come through the Strait of Hormuz has made total price protection challenging. Observers are closely monitoring the situation as the exact impact of the ongoing West Asia conflict on future gas supplies remains unclear. Details remain unconfirmed.

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