Winning Bizness Desk
Mumbai.Delhi markets are witnessing a sharp spike in prices of essential items as the ongoing Iran-Israel conflict disrupts global supply chains. Dry fruits have become up to 50% costlier, while the raw material used in paracetamol has seen a 47% increase. At the same time, a shortage of LPG has pushed over 1.20 lakh consumers to opt for piped natural gas connections in just two weeks, signalling a shift in household energy preferences.
LPG shortage pushes households towards PNG shift
The crisis in the Middle East has led to supply disruptions, resulting in LPG shortages across India. Long queues are visible outside gas agencies, and incidents of black marketing and hoarding have been reported. In response, many households are switching to PNG connections for a more reliable supply.
Key developments include:
- Over 1.20 lakh new PNG connections added in two weeks
- LPG consumption dropped 17.7% to 1.14 million tonnes in early March
- More than 15,000 cylinders seized in anti-hoarding raids
- Over 12,000 enforcement raids conducted nationwide
Hotels and restaurants are also struggling as commercial gas supply remains limited despite partial restoration.
Dry fruits prices surge amid supply disruption
Asia’s largest wholesale market, Khari Baoli in Delhi, has reported a steep rise in dry fruit and herb prices. Traders say most dry fruits, except cashews, are imported from the Middle East, where supply has been hit by the conflict.
Price trends and impact:
- Pistachios, figs, almonds and plums up by 30–40%
- Overall dry fruit prices rise between 20% and 50%
- Dates see higher demand ahead of Eid amid limited stock
- Medicinal herbs supply disrupted, affecting drug prices
The shortage has also impacted pharmaceutical inputs, with paracetamol raw material becoming significantly more expensive.
Shift in consumption towards ready-to-eat food
With cooking gas becoming scarce, consumers are increasingly turning to convenient food options that require minimal preparation. This has led to a noticeable rise in demand for packaged and ready-to-eat items across both metro and smaller cities.
Emerging consumption patterns show:
- Over 15% rise in demand for ready-to-eat meals
- Instant noodles and packaged snacks see higher sales
- Tier-2 cities like Sonipat and Panaji join the trend
- Quick commerce platforms report 20% monthly growth
However, the trend has adversely affected street food vendors, with 20–30% of nearly 50,000 vendors in Delhi facing closure due to rising costs and gas shortages.
Conflict triggers global supply chain disruptions
The crisis began after the United States and Israel launched coordinated strikes on Iran on February 28, 2026, targeting military and nuclear infrastructure. The escalation has created tensions in the Strait of Hormuz, a critical route for global energy supplies.
India imports nearly 80–85% of its LPG through this route and relies on imports for over 60% of its LPG needs. The disruption has therefore had a direct impact on domestic availability, although the government continues to maintain that there is no overall shortage.
India ramps up supply and refinery output
To stabilise the situation, LPG shipments have started reaching Indian ports. The vessel Nanda Devi arrived at Vadinar port carrying 46,500 metric tonnes of LPG, while another ship, Shivalik, delivered around 46,000 metric tonnes at Mundra port.
Government response includes:
- Directing refineries to increase domestic LPG production
- Prioritising household consumption over commercial supply
- Gradually restoring gas supply to hotels and restaurants
- Promoting PNG network expansion across states
The Centre has also announced that states expanding PNG infrastructure rapidly will receive priority in commercial LPG allocation, aiming to reduce dependence on cylinders in future crises.
