Gas on the line: will the Iran war squeeze India's piped gas next?

The Iran war has already rattled India's liquefied petroleum gas (LPG) market.

“- Published The Iran war has already rattled India's liquefied petroleum gas (LPG) market”

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Now another energy artery is under scrutiny: the country's rapidly expanding network of piped natural gas (PNG) - gas delivered by pipeline to homes and businesses.

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Demand for this natural gas comes from fertiliser plants, industry and gas-fired power, as well as city gas networks - which supply PNG to households and CNG (compressed natural gas) to vehicles.

Of these, city gas to homes is the standout grower, expanding steadily as the network spreads across urban India.

That push is mirrored on the ground: India now has more than 15 million PNG connections, a number rising fast as policymakers nudge households to swap cylinders for gas on tap.

At the same time, demand from CNG vehicles has also climbed steadily, with CNG now India's second-largest auto fuel after petrol.

Probably not - at least not immediately.

India's piped gas supply is a blend of domestic production and imports of liquefied natural gas (LNG).

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About half of India's PNG supply is domestic gas drilled from onshore and offshore fields - for example by companies such as ONGC and Reliance.

The balance is met through LNG imports.

"No disruption is expected for homes and vehicles [using piped gas]. The government has given priority to these two sectors," says Rahul Chopra, managing director for the Haryana City Gas Distribution Limited, a countrywide gas company with around 100,000 domestic consumers and 195 CNG fuel stations.

However, about 2,200 of Chopra's industrial and commercial customers are facing a government-mandated 20% supply cut, as gas is diverted to households and vehicles.

In a supply squeeze, the government tends to protect priority sectors - especially fertiliser plants and households connected to piped gas.

That means the first casualties are usually industry and power generators.

When LNG prices spike or cargoes tighten, factories often switch fuels - to fuel oil, LPG or even coal.

Gas-fired power plants simply cut generation.

Despite the domestic cushion, India's piped gas system, like its LPG market, is also exposed to global shocks.

“- Published The Iran war has already rattled India's liquefied petroleum gas (LPG) market”

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In recent years LNG has supplied roughly half of the country's total gas availability.

Imports totalled around 24-25 million tonnes in 2025, making India one of the world's largest LNG buyers.

And a big chunk of that comes from one place: Qatar.

More than half of India's LNG imports are tied up in long-term contracts with Qatari suppliers.

Smaller volumes arrive from the US, Australia, Russia and parts of Africa.

LNG cargoes from Qatar and the UAE must pass through the Strait of Hormuz, the narrow maritime choke-point now at the centre of the Middle East war after the US and Israel launched attacks on Iran.

Roughly 50-55% of India's LNG imports move through this corridor.

So far, the flow has not stopped entirely.

Tankers loaded before the conflict escalated are still sailing.

"Supplies have not been completely disrupted yet. Cargoes that loaded in Qatar before the conflict escalated are still arriving in Asia," says Go Katayama, principal insight analyst for LNG and natural gas at Kpler Insight, a commodity intelligence platform.

Shipping data from Kpler show 13 LNG cargoes loaded between 10-26 February are currently en route to India, with deliveries continuing through March.

But exports from Qatar's giant Ras Laffan LNG complex (77 million tonnes a year) have been halted since 2 March, meaning these vessels could be among the last shipments until safe passage through Hormuz resumes, according to Katayama.

That does not mean India will run out of gas overnight. But it highlights a structural vulnerability.

Unlike crude oil, India does not maintain strategic reserves of LNG.

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Gas is stored mainly as working inventory at regasification terminals - facilities such as Dahej, Hazira, Kochi and Ennore in India - that convert imported LNG back into gas.

Those stocks are modest.

At most, they cover about one to two weeks of imports, depending on terminal operations and cargo schedules, says Katayama.

The system works because ships normally arrive in a steady rhythm. Interrupt that rhythm, and the market must adjust quickly.

For India's urban consumers using piped gas, the immediate risk is price rather than shortage.

If disruption at Hormuz persists, India's gas market will adjust the usual way: through higher prices and weaker industrial demand.

Households may keep their kitchen taps running - but not cheaply.

"There is some price rise expected," says Chopra.

In the end, both homes and factories will pay more; industry will simply bear the deeper cuts.