India Prioritizes Local Fuel Needs Amid Energy Disruptions

India is currently evaluating its domestic energy security as the conflict involving the United States, Israel, and Iran causes significant disruptions to fuel shipments through the Strait of Hormuz. As the world's third-largest oil importer, the nation has instructed energy firms to centralize their data on production and trade to ensure local needs are met before considering exports to neighboring countries. The country maintains a robust refining sector, ranking fourth globally with a total capacity of 5.6 million barrels per day across 23 facilities. Private players, including RELIANCE INDUSTRIES LTD, Nayara Energy, and HPCL Mittal Energy—a joint venture involving Hindustan Petroleum Corporation Limited—control approximately 40% of this capacity. Despite this infrastructure, domestic extraction by Oil India Limited and the Oil and Natural Gas Corp covers only a fraction of national demand. Consequently, the nation relies on imports for over 90% of its oil and half of its natural gas requirements. Supply chains have faced additional pressure as Qatar, India's second-largest supplier of liquefied natural gas (LNG), declared force majeure. This comes at a time when roughly 40% of crude imports and 90% of liquefied petroleum gas (LPG) imports traditionally originate from the Middle East. Distribution is largely managed by state-owned retailers such as Bharat Petroleum Corporation Limited and Indian Oil, which oversee the majority of the country's 101,470 fuel stations. These retailers often source products from specialized refiners like Chennai Petroleum Corporation Limited and Mangalore Refinery and Petrochemicals to satisfy consumer demand. Between April 2025 and January 2026, total fuel consumption reached 222.3 million tons, with gasoil and gasoline making up the bulk of usage. In response to emerging gas shortages, the federal government has utilized emergency powers to prioritize residential needs. Major infrastructure and supply firms, including Petronet LNG Limited and GAIL (India) Limited, have issued force majeure notices to industrial clients. Refiners have been directed to maximize LPG output to support the 333 million households that depend on it for cooking, while citizens are encouraged to transition to piped natural gas where available to prevent supply strain.