India’s August LPG Consumption Reaches Six-Month High as Supply Restrictions Ease

NEW DELHI — India’s liquefied petroleum gas (LPG) consumption rose 3.2 per cent month-on-month to a six-month high of approximately 2.42 million tonnes in August 2026, according to provisional data from the Petroleum Planning & Analysis Cell (PPAC).

The growth was driven by the gradual easing of supply restrictions and a reduction in conflict intensity in West Asia. This marks the third consecutive month of increased LPG consumption as India secured additional cargoes from the United States and expanded supplies from the Middle East Gulf region amid intermittent peace talks between the United States and Iran.

Earlier in the year, consumption faced severe headwinds. During the first half of the 2026 calendar year, India’s total LPG consumption declined by 8 per cent year-on-year to around 14.74 million tonnes. The contraction was primarily caused by the West Asia conflict and the temporary closure of the Strait of Hormuz, which disrupted key supply routes.

In response to the supply constraints, the government had implemented rationing policies, allocating 100 per cent of supplies to the domestic sector and 70 per cent to commercial consumers. These restrictions were officially removed on June 25, 2026. Households account for roughly 90 per cent of total LPG consumption in the country, with commercial and industrial users making up the remaining share, serving a cooking medium relied upon by over 33.50 crore households.

Despite the month-on-month recovery, overall usage in August remained down by more than 14 per cent compared to the same period annually.

Meanwhile, trends in other petroleum products showed mixed results in August 2026. Petrol consumption surpassed 3.824 million tonnes, registering an 8 per cent year-on-year growth driven by personal vehicle sales, though it remained nearly flat month-on-month. August marked the second-highest recorded month for petrol consumption, following 3.91 million tonnes in May 2026.

Conversely, diesel consumption fell below the 8 million tonne mark for the first time since March 2026. India's diesel usage dropped 13.5 per cent month-on-month to approximately 7 million tonnes in August, though it still registered a 6.5 per cent annual increase. The dip in diesel usage is largely attributed to the monsoon season, which typically slows down industrial activity, mining operations, and freight mobility, with support primarily coming from Kharif sowing activities.

"The recovery in India's LPG consumption highlights the direct correlation between geopolitical stability and domestic industrial supply chains. When critical trade routes like the Strait of Hormuz face disruption, energy-dependent sectors and commercial consumers immediately bear the brunt through rationing. For businesses, this normalization following the June policy rollbacks provides much-needed operational relief. It serves as a reminder that robust supply chain diversification remains essential for macroeconomic stability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes