The Pulse | Society | South Asia

The Gulf War and Flawed Diplomacy Fuel LPG Crisis in India

While India’s pro-U.S.-Israel position in the war has not drawn public ire, the LPG shortage is becoming an issue in upcoming assembly elections.

A street vendor refuels a motorbike with petrol from a water bottle, Udaipur, India.

On March 16, West Bengal Chief Minister Mamata Banerjee led a massive protest rally in Kolkata. Participants carried cut-outs of cooking gas cylinders and chanted slogans criticizing the Narendra Modi government’s failure in maintaining the supply of Liquefied Petroleum Gas (LPG) across the country in the aftermath of the U.S.-Israel war on Iran. “Why didn’t the government prepare an action plan in advance?” asked Banerjee, one of India’s key opposition leaders.

In the southern state of Tamil Nadu, Chief Minister M.K. Stalin alleged that the “severe LPG cylinder shortage” happened because of the Modi government’s “wrong decisions,” including foreign policy failures. “No foresight. No precautionary measures either. It is the public who suffers trouble because of them,” alleged Stalin. His party, the Dravida Munnetra Kazhagam (DMK), organized protest rallies across the state on March 15.

West Bengal and Tamil Nadu are among four states that will vote in state assembly elections next month. Three of them — West Bengal, Tamil Nadu and Kerala — are ruled by opposition parties and Modi’s Bharatiya Janata Party (BJP), which has limited presence in these states, is desperate to make inroads.

But it is not just the states heading to elections that are seeing protests against the Modi government’s poor preparedness for LPG shortages. Across India, people are angry as they are having to wait in long queues all day to buy cooking gas cylinders.

Cooking gas cylinders, until recently, were easily available. They would be delivered a day after a request for a cylinder was registered. They are now delivered, if at all, after a month and are being sold at higher rates on the black market.

Until recently, the Modi government refused to admit that a crisis was looming. It was only on March 18 that the government acknowledged that the LPG situation in the country was “worrisome.”

Fuel prices haven’t yet been raised at petrol stations, but people are worried. The stock market has been badly hit — roughly $240 billion in investor wealth got wiped out in just about a week as the crisis intensified. The Indian rupee has hit record lows and is trading at about 92.47 rupees per U.S. dollar.

The LPG and fuel crisis in India has been triggered by the U.S.-Israel war on Iran, which began on February 28. Both sides have not only targeted military sites but also destroyed oil and gas facilities and infrastructure. Compounding this is the situation in the Strait of Hormuz, the critical waterway through which Gulf oil and gas are transported via tankers to the Arabian Sea and onward to the Indian Ocean and beyond. Iran has targeted tankers traversing the Strait and permitted the tankers of just a few countries to pass through the waterway. This has left Gulf oil producers with no sea route by which to safely deliver oil and LNG.

India, which is deeply connected to West Asia for energy, trade, and migration, imports roughly 85-90 percent of its crude oil and a major part of its LPG/LNG from the region. Over half of it comes through the Strait of Hormuz.

While the crisis in West Asia is partly to blame for India’s troubles with sourcing oil and gas from the region, the Indian government’s policies and actions on the foreign policy front cannot escape responsibility for the current shortages in the country.

With its relationship with the U.S. and Israel growing in recent decades, India’s longstanding civilizational and energy ties with Iran have weakened. However, it is the recent actions of the Modi government that have particularly undermined India’s relations with Iran and drawn its ire.

Modi visited Israel less than 48 hours before the U.S. and Israel launched their military strikes on Iran. Although both India and Israel clarified that Modi knew nothing about the planned attack on Iran, India’s response to the war did little to assuage the Iranians.

India displayed its pro-U.S.-Israel position on the war by not condemning the attack on Iran or the assassination of Supreme Leader Ayatollah Ali Khamenei. India also co-sponsored a U.N. Security Council resolution condemning Iran for its attacks on Gulf states and demanding a halt to hostilities by Tehran. India’s Foreign Secretary Vikram Misri signed the condolence book at the Iranian Embassy in New Delhi, expressing “sincerest condolences on behalf of the government and people of India,” three days after the killing.

The current situation has prompted opposition parties in India to question the Modi government’s claim of practicing “strategic autonomy” and accused it of showing “moral cowardice.”

While India’s foreign policy positions may not have a direct impact on India’s larger public opinion and electoral pulse, the situation over LPG shortages can hit the government hard. With this in mind, the Ministry of External Affairs has begun negotiating with Iranian officials to permit Indian vessels carrying LPG and crude oil to pass through the Strait of Hormuz. A couple of tankers have crossed the Hormuz safely and reached Indian ports so far. But an understandably peeved Iran has not yet extended a blanket clearance for Indian ships to pass the Hormuz Strait.

With opposition leaders slamming the BJP for causing hardship to the people and the possibility of the issue impacting assembly election results, the government has taken some measures to address the crisis. It has regulated the distribution of gas cylinders, launched a crackdown on hoarding, increased domestic refinery production, and accelerated imports from alternative regions.

However, these are short-term measures. The crisis has exposed the need for a bigger action—fixing relations with Iran amidst its embrace of the U.S., Israel and pro-U.S. Gulf countries.

In addition to a fuel crisis, the Gulf War is likely to hit India’s remittances sharply. The region hosts about 9 million Indian workers, who send home about $50 billion annually. Their safety — both physical and economic — is of concern to India. If the war prolongs, Indian expatriates in the region will head home. A crippling economic crisis looms.

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On March 16, West Bengal Chief Minister Mamata Banerjee led a massive protest rally in Kolkata. Participants carried cut-outs of cooking gas cylinders and chanted slogans criticizing the Narendra Modi government’s failure in maintaining the supply of Liquefied Petroleum Gas (LPG) across the country in the aftermath of the U.S.-Israel war on Iran. “Why didn’t the government prepare an action plan in advance?” asked Banerjee, one of India’s key opposition leaders.

In the southern state of Tamil Nadu, Chief Minister M.K. Stalin alleged that the “severe LPG cylinder shortage” happened because of the Modi government’s “wrong decisions,” including foreign policy failures. “No foresight. No precautionary measures either. It is the public who suffers trouble because of them,” alleged Stalin. His party, the Dravida Munnetra Kazhagam (DMK), organized protest rallies across the state on March 15.

West Bengal and Tamil Nadu are among four states that will vote in state assembly elections next month. Three of them — West Bengal, Tamil Nadu and Kerala — are ruled by opposition parties and Modi’s Bharatiya Janata Party (BJP), which has limited presence in these states, is desperate to make inroads.

But it is not just the states heading to elections that are seeing protests against the Modi government’s poor preparedness for LPG shortages. Across India, people are angry as they are having to wait in long queues all day to buy cooking gas cylinders.

Cooking gas cylinders, until recently, were easily available. They would be delivered a day after a request for a cylinder was registered. They are now delivered, if at all, after a month and are being sold at higher rates on the black market.

Until recently, the Modi government refused to admit that a crisis was looming. It was only on March 18 that the government acknowledged that the LPG situation in the country was “worrisome.”

Fuel prices haven’t yet been raised at petrol stations, but people are worried. The stock market has been badly hit — roughly $240 billion in investor wealth got wiped out in just about a week as the crisis intensified. The Indian rupee has hit record lows and is trading at about 92.47 rupees per U.S. dollar.

The LPG and fuel crisis in India has been triggered by the U.S.-Israel war on Iran, which began on February 28. Both sides have not only targeted military sites but also destroyed oil and gas facilities and infrastructure. Compounding this is the situation in the Strait of Hormuz, the critical waterway through which Gulf oil and gas are transported via tankers to the Arabian Sea and onward to the Indian Ocean and beyond. Iran has targeted tankers traversing the Strait and permitted the tankers of just a few countries to pass through the waterway. This has left Gulf oil producers with no sea route by which to safely deliver oil and LNG.

India, which is deeply connected to West Asia for energy, trade, and migration, imports roughly 85-90 percent of its crude oil and a major part of its LPG/LNG from the region. Over half of it comes through the Strait of Hormuz.

While the crisis in West Asia is partly to blame for India’s troubles with sourcing oil and gas from the region, the Indian government’s policies and actions on the foreign policy front cannot escape responsibility for the current shortages in the country.

With its relationship with the U.S. and Israel growing in recent decades, India’s longstanding civilizational and energy ties with Iran have weakened. However, it is the recent actions of the Modi government that have particularly undermined India’s relations with Iran and drawn its ire.

Modi visited Israel less than 48 hours before the U.S. and Israel launched their military strikes on Iran. Although both India and Israel clarified that Modi knew nothing about the planned attack on Iran, India’s response to the war did little to assuage the Iranians.

India displayed its pro-U.S.-Israel position on the war by not condemning the attack on Iran or the assassination of Supreme Leader Ayatollah Ali Khamenei. India also co-sponsored a U.N. Security Council resolution condemning Iran for its attacks on Gulf states and demanding a halt to hostilities by Tehran. India’s Foreign Secretary Vikram Misri signed the condolence book at the Iranian Embassy in New Delhi, expressing “sincerest condolences on behalf of the government and people of India,” three days after the killing.

The current situation has prompted opposition parties in India to question the Modi government’s claim of practicing “strategic autonomy” and accused it of showing “moral cowardice.”

While India’s foreign policy positions may not have a direct impact on India’s larger public opinion and electoral pulse, the situation over LPG shortages can hit the government hard. With this in mind, the Ministry of External Affairs has begun negotiating with Iranian officials to permit Indian vessels carrying LPG and crude oil to pass through the Strait of Hormuz. A couple of tankers have crossed the Hormuz safely and reached Indian ports so far. But an understandably peeved Iran has not yet extended a blanket clearance for Indian ships to pass the Hormuz Strait.

With opposition leaders slamming the BJP for causing hardship to the people and the possibility of the issue impacting assembly election results, the government has taken some measures to address the crisis. It has regulated the distribution of gas cylinders, launched a crackdown on hoarding, increased domestic refinery production, and accelerated imports from alternative regions.

However, these are short-term measures. The crisis has exposed the need for a bigger action—fixing relations with Iran amidst its embrace of the U.S., Israel and pro-U.S. Gulf countries.

In addition to a fuel crisis, the Gulf War is likely to hit India’s remittances sharply. The region hosts about 9 million Indian workers, who send home about $50 billion annually. Their safety — both physical and economic — is of concern to India. If the war prolongs, Indian expatriates in the region will head home. A crippling economic crisis looms.

Snigdhendu Bhattacharya

Snigdhendu Bhattacharya, the author of two non-fiction books on India’s ultra-Left and the Hindu right, writes and comments on India’s politics, environment, human rights and culture.

Gulf War 3.0-India-Iran

India Gulf remittances

India's West Asia policy

Indian foreign policy

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