Iran war has cut off bulk of India’s gas imports. Pain will be felt from kitchens to factories, but there’s a way out

It’s four days since Qatar, world’s third largest LNG exporter, shut down production after an Iranian attack. In one stroke, 20% of world’s LNG supply switched off. Qatar said it would need at least a month to resume production, but the way Iran’s targeting it – there were multiple explosions over Doha yesterday – it might take longer. That’s worrying everyone – gas prices in Europe, for example, rose 54% on Monday. India is especially affected because it gets 40% of its imported LNG from Qatar. 

The crisis boils down to price and availability. With contracted supplies unavailable, India must buy in the “spot” market, where prices have hit the roof. Gas that cost $10 a few days ago is now going for $25. Consider how India uses gas, and the problem becomes evident. The biggest share (28%) goes into fertilisers like urea. City gas demand, which includes PNG for kitchens and CNG for cars and buses, comes next, and is growing quickest. Last, gas fuels power plants and industries. 

At its current high price, using gas to make electricity doesn’t make sense. Fertilisers are vital, but other industries like glass and ceramics cannot ignore energy prices. That leaves city gas, to which govt gives highest importance. Even if all gas imports halt, your kitchen and your car have first claim on India’s own gas production, which meets roughly half of yearly demand. But that won’t insulate you from high prices, as PNG and CNG suppliers blend their domestic gas quotas with imported gas. 

This could hurt your pocket, and if the crisis persists, it might reshape India’s auto industry. Last year, for the first time CNG cars outsold diesel cars, taking 21% market share. This is good for air quality, but high CNG prices and even longer queues at pumps will dull demand. There’s a parallel crisis of LPG, the older kitchen gas still used by 33cr consumers. India imports 60% of its LPG, mostly from W Asia. So the longer Iran war lasts, the more households will suffer. Unless Centre and states absorb increased costs, which is imprudent. 

Right now, it’s important to tap other gas suppliers, like Australia and Canada, but long-term, we need to scale up biogas production. India can meet all of its gas needs from agricultural and urban waste. Cattle dung alone can be turned into 39,000 tonnes of gas daily. Add 16,000 tonnes from paddy straw every day. But we made just 31,000 tonnes of biogas in entire 2024-25. It’s a national waste.

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