Explainer The Greentrepreneur Series · #005 · Energy Geopolitics · By Darshan Parikh · October 2026 · 6 min read

Why India's gas got expensive in 2026

Half of India's gas now comes in as LNG. When the Strait of Hormuz closed in 2026, the price of that gas roughly doubled, and gas use fell.

On 28 February 2026, a war with Iran began. Within days, QatarEnergy stopped LNG production, and the flow through the Strait of Hormuz stopped with it. India felt it at the meter and at the factory gate.

Key numbers

68.8 bcm, half imported as LNGIndia's gas use, FY2025-26

52.5 Mtpa, ~47% used in 2025India's LNG import terminals

~₹1,040 → ~₹2,430 per MMBtuAsian spot LNG, before the war → now

~₹308 per MMBtuUS home gas price (Henry Hub)

+40% (524 → 700+ Mtpa)World LNG capacity, by 2030

65 → 103 bcmIndia's gas demand, 2023 → 2030

Sources: Petroleum Planning and Analysis Cell; International Gas Union, World LNG Report 2026; Global LNG Hub (2026); International Energy Agency. ₹ at ₹96.4 per dollar.

What is LNG, and why does India use so much?

LNG is natural gas cooled to about −162°C. As a liquid it takes around 600 times less space, so it can cross oceans by ship.

India imported 50.1% of its gas as LNG in the year to March 2026. The rest came from its own fields. Before the war, a fifth of the world's LNG passed through Hormuz.

Who uses the gas?

Fertiliser is the biggest user, at 28% of India's gas. City gas follows at 24%, then industry at 19%, power at 12% and refineries at 8%.

City gas is the fastest-growing part. India has 9,096 CNG stations as of July 2026, and 10.34 lakh CNG cars were sold in FY26, about 22% of cars.

What happened to the price?

Asian LNG cost about ₹1,172 per MMBtu on average in 2025. It hit about ₹2,448 at the peak on 3 March 2026.

India's own capped gas price is about ₹675 per MMBtu. The US Henry Hub price is about ₹308. Imported LNG therefore costs three to eight times as much as domestic gas.

Imported gas was never cheap. In 2026 it became expensive at the same time as it became scarce.

Where did the supply come from instead?

Qatar supplied 46% of India's LNG in 2025. In May to July 2026, its share fell by 91%. The United States became India's largest supplier, and Nigeria, Oman and Angola filled more of the gap.

India has also signed longer deals. HPCL signed a 10-year LNG supply deal with ADNOC Gas in January 2026, and a US framework for energy purchases followed in February.

Is the glut coming?

A record wave of new LNG export capacity was meant to make gas cheap from 2026. About 234 Mtpa of new export capacity is approved or being built, mostly in the US and Qatar.

The IEA now says the expected glut is delayed by at least two years. About 120 bcm of supply is lost between 2026 and 2030 as a result.

The story in 10 slides

Slide 1 of the #005 LNG Outlook carousel

Slide 2 of the #005 LNG Outlook carousel

Slide 3 of the #005 LNG Outlook carousel

Slide 4 of the #005 LNG Outlook carousel

Slide 5 of the #005 LNG Outlook carousel

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Slide 8 of the #005 LNG Outlook carousel

Slide 9 of the #005 LNG Outlook carousel

Slide 10 of the #005 LNG Outlook carousel

What does India plan?

India's gas demand is set to rise from 65 bcm in 2023 to about 103 bcm by 2030 in the IEA's base case. With policy support it could reach 120 bcm. Most of the growth comes from city gas.

The government also requires city gas firms to blend compressed biogas, from 1% in FY26 to 5% from 2028-29. That links this story to the biogas plants in #009.

Who is building on gas?

Essar Ultra Gas runs LNG fuel stations for long-haul trucks. GAIL, Deendayal Port and DNV have a pact to fuel ships with LNG at Kandla.

What it takes to build on gas

Fuel stations. Essar Ultra Gas runs LNG fuel stations for long-haul trucks.
Ship fuel. GAIL, Deendayal Port and DNV have a pact to fuel ships with LNG at Kandla.
City gas. India has 9,096 CNG stations as of July 2026, and city gas is the fastest-growing use.
Biogas blend. City gas firms must blend compressed biogas, from 1% in FY26 to 5% from 2028-29.

The gas is needed, so the work is in where it comes from and at what price.

GAIL, Deendayal Port and DNV have a pact to fuel ships with LNG at Kandla.

The gas is needed. The question is where it comes from, and at what price.