India’s LPG Shortage Triggers Surge in California Gasoline Prices Amid Global Supply Chain Struggles.

The ongoing geopolitical crisis stemming from the U.S.-Israeli war with Iran has initiated a severe disruption in the global energy supply chain, significantly affecting both India and California. The near-total blockade of the Strait of Hormuz by Iran has cut off approximately 20% of the world’s oil supply, leading to a pronounced shortage of liquefied petroleum gas (LPG) in India and a dramatic increase in gasoline prices in the U.S. state of California. By May 2026, California’s retail gasoline price surged to an average of $6.14 per gallon, marking the highest levels seen since 2022, while India is scrambling to shore up LPG supplies that are vital for its cooking fuel needs.

For the common citizen, these developments have led to heightened living costs and reduced access to essential resources. In India, the constraints on LPG supplies have forced households to queue for hours to obtain cooking gas, often resulting in long waits and reliance on the black market. Similarly, California motorists are grappling with soaring gasoline prices just as summer driving season approaches, further straining household budgets. The interconnected nature of the energy market means that the reductions in alkylate exports from India—due to its prioritization of LPG—have compounded the challenges faced by California, threatening to push prices well beyond the current averages, potentially reaching $6.50 or more per gallon.

Looking ahead, the government and regulatory bodies are under considerable pressure to devise solutions to navigate this complex crisis. In India, refiners are being directed to maximize LPG output at the expense of alkylate production, which could limit exports and worsen the situation in fuel-dependent regions like California. For California, any immediate tax relief from Governor Gavin Newsom could inadvertently escalate demand and further exacerbate the supplies of alkylates already under strain. Alternatives such as waiving specific fuel specifications may be considered, but officials from the California Energy Commission remain skeptical about the effectiveness of such measures. As geopolitical tensions persist and energy supply chains remain disrupted, both regions must brace for continued volatility in fuel prices and availability.