Key insights
- Indian Oil is experiencing increased losses on LPG sales due to rising prices caused by Middle East supply disruptions related to the Iran conflict. This is forcing the company to diversify its sourcing of crude and LPG. While the direct impact on US equities is limited, it highlights potential inflationary pressures and supply chain vulnerabilities in the global energy market.
Investing.com -- Indian Oil Corp, India’s largest fuel retailer, is losing 617 rupees ($6.39) on each liquefied petroleum gas cylinder sold, up from 171 rupees in April, as the Iran war drove up prices, the company’s finance chief said Tuesday.
The revenue loss per 14.2-kilogram LPG cylinder stood at 100 rupees in January-March, Anuj Jain told analysts. Indian state-run fuel retailers sell LPG for households at discounted rates.
In 2025, India consumed 33.15 million tons of LPG. Imports accounted for about 60% of demand, with 90% of those supplies coming from the Middle East.
LPG supplies from the Middle East have been disrupted by the closure of the Strait of Hormuz following the U.S.-Israeli war with Iran.
The closure has prompted Indian Oil to diversify its sourcing of crude, LPG and liquefied natural gas to meet local demand. The company recently bought LNG from Oman, Nigeria, Angola and Indonesia after major suppliers in the Middle East declared force majeure.
"Our priority is to ensure the energy security. Because of this disruption, we have diversified our crude sourcing and LPG sourcing. We have changed our refinery diet," Jain said. The company is operating its refineries at full capacity.
Indian Oil has about a month’s crude inventory, Jain said.
By the end of the year, Indian Oil plans to expand its Panipat refinery to 500,000 barrels per day, its Gujarat refinery to 360,000 bpd, and its Barauni plant to 180,000 bpd, Jain said.
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