India’s LPG Shortage Is Triggering Gasoline Pressures, Prices In California

India-West News Desk

LOS ANGELES, CA – India’s cooking gas shortage is adding pressure to gasoline prices in California as supply disruptions linked to the U.S.-Israel conflict with Iran continue to affect global energy markets.

California motorists are already paying some of the highest fuel prices in the US, with average gasoline prices reaching $6.14 per gallon on May 14.

The near-closure of the Strait of Hormuz has disrupted a major portion of global oil and fuel shipments, affecting both India’s liquefied petroleum gas (LPG) supplies and California’s gasoline market, Reuters reported.

Part of the pressure is linked to India’s efforts to secure domestic LPG supplies, which are widely used as cooking fuel across the country.

Before the Iran conflict, more than 90 per cent of India’s LPG imports came from the Middle East through the Strait of Hormuz. With supplies disrupted, the Indian government has directed refiners to maximize LPG production.

To increase cooking fuel output, Indian refiners have reduced production of alkylates, a fuel additive used in cleaner-burning gasoline blends. California relies heavily on alkylates because the state requires a specialized gasoline blend designed to reduce smog emissions.

The situation has also been worsened by lower fuel exports from Asian refiners facing reduced access to Middle Eastern crude oil supplies.

Reliance Industries, which operates the world’s largest refinery complex in Gujarat, said earlier this month that it was reducing alkylate production and exports to prioritize LPG output, Reuters noted.

According to energy analytics firm Kpler, India’s alkylate exports fell to 33,000 barrels per day in April from 61,000 barrels per day in March, marking the lowest level since October 2023.

A spokesperson for the California Energy Commission said the state is monitoring the situation closely but does not currently expect a fuel shortage.

“California is aware of India’s evolving priorities but has a healthy supply of gasoline and blending components,” the spokesperson told Reuters.

Industry analysts said India has limited options as domestic LPG shortages continue. In several parts of India, consumers have reportedly waited hours to purchase LPG cylinders, while some have turned to black-market supplies. Restaurants and businesses have also warned of disruptions due to shortages.