Two-Thirds of a Cylinder's Journey, Rerouted Overnight

Diversification Kept the Gas Flowing. It Didn't Keep the Price Down.

India imports roughly 60% of its LPG needs and nearly two-thirds of those imports now come from the United States instead of the Gulf. That's the aggregate story: supply diversification worked, the shelves didn't go empty.

Zoom into an oil marketing company's balance sheet, though and a different number tells the real story - LPG under-recoveries per cylinder have tripled, because the mechanism that made diversification possible also made it expensive.

Why Rerouting to America Costs More Than It Sounds India's

LPG delivery system was built around Indian-flagged tonnage sized for a four-to-seven-day Gulf voyage. The U.S. route takes roughly six weeks. India doesn't have enough of its own ships to run that longer route self-sufficiently, so it has been forced to charter vessels from other carriers at premium rates just to keep volumes moving - layering higher freight costs on top of the LPG's actual price.

That gap between what the OMC pays to land a cylinder's worth of gas and what it's allowed to charge consumers is exactly what "under-recoveries" means in practice: someone in the supply chain - the OMC and ultimately the exchequer through subsidy support - absorbs the difference between resilience and cost.

Who Is Actually Carrying This

A domestic LPG consumer likely hasn't noticed a dramatic price jump - a "modest price hike," as the reporting notes, has done little to offset the under-recovery. That gap not being passed fully to consumers is a policy choice and it means the actual burden sits with OMCs and, indirectly, government finances that will eventually need to backstop those losses if the crisis extends, as forecasters expect, into 2027.

Meanwhile, India's own strategic reserve - 5.33 million tonnes of crude, good for just nine days - offers essentially no cushion for LPG specifically, since India holds "almost no strategic gas reserves" at all. The country's real shock absorber during this crisis has not been stored reserves; it has been the willingness to pay a freight premium and lean on demand destruction and refinery expansion (the Barmer refinery's startup, mentioned as a "welcome relief") to bridge the gap.

The Distinction That Actually Matters for the Exam This is not a

story where diversification "solved" India's energy security problem - it's a story where diversification bought India time and volume at a real, ongoing cost, while the underlying vulnerability (minimal strategic reserves, insufficient national shipping tonnage for longer routes) remains structurally unaddressed.

If this conflict drags into 2027 as analysts expect, the freight-cost burden compounds; a supply chain rerouted under pressure is not the same as an energy security architecture built for resilience. For an aspirant, the lesson isn't "India diversified successfully"

• it's "India improvised successfully, at a cost it hasn't yet decided who will ultimately bear."