PM Modi to Review State Preparedness Amid West Asia Conflict and LPG Shortage Concerns

Key Takeaways

• Prime Minister Modi to meet CMs to review West Asia conflict impact on fuel supply.
• Karnataka and Assam assure surplus fuel despite panic buying in several regions.
• Asian nations including Philippines and Sri Lanka seek Russian oil to counter shortages.

Prime Minister Narendra Modi is set to interact with Chief Ministers across India on Friday to review state preparedness amidst a growing fuel crisis triggered by the West Asia conflict. This high-level meeting, the first of its kind for the Prime Minister on this specific issue, aims to ensure synergy of efforts through the "Team India" initiative.

The urgency stems from a government memo seen by Reuters, which urges automakers to tighten production schedules to conserve fuel. Fears of shortages, driven by disrupted oil and gas imports from the Gulf due to the Iranian war, have prompted the Heavy Industries Ministry to advise companies to shift factory operations from oil-based fuels to electricity. The advisory, issued on March 25, 2026, highlights India's mounting concern over the disruption to global energy flows and raw material availability.

While the central government focuses on coordination, states have reported mixed scenarios regarding fuel availability. In Assam, the state government declared a significant surplus, noting that 73% of fuel produced in its four refineries remains unconsumed locally. Conversely, Meghalaya has formally requested a 50-60% increase in LPG allocation after facing reduced deliveries, particularly affecting the hospitality sector. State Minister Methodius Dkhar confirmed that while supplies have slightly improved, commercial cylinder availability remains below previous levels, raising the specter of an LPG shortage for hotels and restaurants.

On the ground, panic buying has temporarily strained supplies in Karnataka. Indian Oil Corporation (IOCL) clarified on March 26 that stocks in Bengaluru and across the state remain adequate, attributing temporary outlet shortages to an unusual surge in consumer purchases. Similarly, Andhra Pradesh Minister Nadendla Manohar assured the public that no shortages exist in his state, urging citizens to ignore social media rumors and asserting that adequate stocks are available for cooking gas, petrol, and diesel.

The crisis has triggered a scramble for alternative energy sources across Asia. With the Iran war blocking traditional supply routes, a wave of nations including Vietnam, Thailand, the Philippines, Indonesia, and Sri Lanka are lining up to purchase Russian oil. A vessel carrying over 700,000 barrels of Russian crude recently arrived in the Philippines, marking a significant shift as the import-dependent archipelago expands its options. Sri Lanka and Russia have also commenced talks, led by Deputy Energy Minister Roman Marshavin, to secure refined petroleum supplies.

Amidst these global shifts, the Indian government is exploring new trade mechanisms to protect its finances. Sources indicate that New Delhi seeks to trade oil with West Asian nations in local currencies to combat rising prices and the impact of a falling rupee. This diplomatic and economic maneuvering coincides with the European Commission's urgent call for EU nations to refill gas storage caverns before the upcoming winter, as European gas prices have surged over 70% since the conflict escalated.

India and Europe Pivot Strategies Amidst Oil Market Volatility

The convergence of domestic supply chain challenges and global geopolitical instability marks a critical pivot point for energy security. With the West Asia conflict continuing to disrupt the traditional flow of resources, India's dual approach of securing Russian supplies and promoting local currency trade reflects a strategic adaptation to volatile markets. The government's directive to automakers to reduce oil dependence and the rush by state governments to streamline pipeline approvals suggest that the immediate focus is on operational continuity. As Asian nations compete for limited Russian oil stocks, the potential for demand to outstrip supply could drive prices higher, necessitating sustained vigilance from both the central and state governments to manage public sentiment and ensure economic stability in the coming months.