India’s LPG shortage will make dal compete with data

By Andy Mukherjee

With the war in Iran now in its second month, India’s cooking-gas shortage is turning serious. Policymakers must view this as more than a temporary blip; it is a crisis that may permanently shift how the world’s most-populous nation consumes energy.

Electric cooktops are vanishing from shelves: Amazon.com Inc.’s local unit reported a 30-fold jump in sales. This marks a pivot for a country where liquefied petroleum gas, or LPG, has 332 million customers. The gas comes home in red-colored cylinders, delivered by a vast distribution network controlled by state-owned refiners. Assuming 10 per cent of households switch to electric and 70 per cent cook dinner simultaneously, the extra 28-gigawatt demand equals nearly a tenth of the summer peak load.

This additional load is more than the power-guzzling potential of all data centers under construction globally. Should the LPG squeeze worsen, planners may have to tell Silicon Valley firms investing in India to go slow. They want to lower the cost of AI tokens by tapping India’s solar power, but New Delhi must prioritize human welfare over artificial intelligence.

Since kitchens add to demand after sunset, capital must flow toward solar-power storage. India’s grid is robust, but substations need upgrades. The neighborhood transformer that has adapted to an increasingly air-conditioner-heavy lifestyle might fry if everyone cooks dal at 8 pm.

Even before war-induced fertilizer shortages raise food prices, the economics of an Indian meal are changing. Imports meet 65% of LPG demand. Roughly 90 per cent of shipments originate in the Persian Gulf; these vessels are now stranded or trickling through the Strait of Hormuz in navy-escorted convoys. Even the Red Sea route for US and Norwegian LPG is in doubt with Houthi involvement in the conflict.

New Delhi is aggressively pushing urban households toward piped natural gas, or PNG. This is the right short-term move for three reasons. One, China and India are outliers in Asia because their power sectors use little LNG; lit stoves won’t cause blackouts. Two, availability of domestic gas in India makes import dependence less acute than for crude oil-derived LPG. If global deficits worsen, LNG can be diverted from transport to kitchens. Three, India can buy US shale gas via the Cape of Good Hope, despite the higher cost.

Conversely, LPG is beholden to the Strait of Hormuz. Propane and butane processing at domestic refineries has been stagnant for years amid surging rural demand. To reduce kitchen smoke, Prime Minister Narendra Modi’s government has added more than 100 million subsidized LPG customers over the past decade. While laudable and popular, the program ignored energy security. Before the start of the war, local LPG storage was adequate to meet just 17 days of demand, down from 22 in 2008.

Cylinder prices rose 7 per cent in March and may climb further after this month’s crucial state elections. Although the government maintains that supplies of domestic LPG cylinders are normal, it has mandated refill delays. Commercial supplies — their blue-colored cylinders are bigger — have been cut. The street-food scene at New Delhi’s bus station has gone quiet. The Bloomberg News reporters who went there recently came across empty stalls. Labor is starting to flee industrial hubs like Surat in Gujarat, as anxiety rises among migrant workers over the cost of their next meal. LPG prices in the black market are soaring. In parliament, Modi compared the current situation to the Covid-19 crisis, when a mass exodus tanked the economy.

My first memory of my mother’s kitchen in northern India is a coal oven — the 1973 oil shock had made kerosene stoves a luxury. In the 1980s, LPG became the middle-class norm.

Another shift is arriving. Consumers are rational; they know 1.4 billion people cannot rely on peace in the Middle East to cook their meals. In the long run, only the sun can be India’s savior. Until there is adequate solar-power storage to meet nighttime load, abundant local coal will keep electricity flowing to kitchens. If influencers haven’t yet mastered making samosas in air fryers, they should.

Energy planners must decide what matters more: spending electricity on exporting AI tokens to the West, or keeping dosa and dal affordable for local families. Now is not the time to do both.