The world has seen no shortage of energy crises in recent memory. What it has consistently lacked is a government that managed one well—absorbing the shock, protecting citizens, keeping industry running, and emerging without rewriting the rulebook in haste. During the recent West Asian conflict, when supply routes faltered and energy markets turned volatile, India did precisely that. The response did not make for dramatic headlines. But it was quietly remarkable.
The key to India’s response is that it was not improvised. The legal architecture—control orders, statutory allocation mechanisms and distribution frameworks—had been built in calmer times and were ready when needed. When LPG imports through the Strait of Hormuz reportedly fell by over 45% in a single month due to the conflict, the government did not scramble for emergency legislation. It issued a control order directing refineries to maximise domestic LPG production by diverting C3-C4 streams. Within five days, output rose by an estimated 25–28%.
Diplomacy as infrastructure
A central pillar of the response was energy diplomacy—the recognition that bilateral ties and diversified sourcing are critical to energy security. When the Strait of Hormuz came under strain, India’s options depended on alternatives already in place.
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Those alternatives proved substantial. LPG supplies were secured from multiple geographies, including the United States, Russia, Australia, Saudi Arabia and the UAE, allowing import dependence to fall sharply—from about 54 TMT per day to nearly 30 TMT per day. This was achieved not by curbing consumption but by rerouting supply through channels built over years of sustained engagement. Such resilience is the outcome of trade agreements and steady diplomatic groundwork that rarely attracts attention.
A crisis absorbed by the state
What sets India apart is the extent to which the cost of the crisis was absorbed by the state rather than passed on to consumers. Even as crude prices surged, petrol and diesel prices remained unchanged at the pump—unlike in many countries where increases were passed through.
The same applied to LPG. The PMUY household cylinder price was held at ₹613. For non-subsidised cylinders, the government absorbed a large part of the increase—₹74 of a ₹134 warranted hike—passing on only ₹60. Domestic aviation turbine fuel (ATF) was kept at roughly half the prevailing market rate, shielding over 4.5 lakh daily domestic passengers, while international carriers continued to pay market prices.
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The fiscal burden is not insignificant, and a prolonged crisis would require a different approach. But in this instance, the government made a calibrated decision to absorb the shock institutionally rather than disperse it across millions of households.
Since March 23, over 8.9 lakh such cylinders have reportedly been sold. The Centre also doubled state-wise daily quotas for migrant workers, directing states to coordinate distribution through oil marketing companies.
Subtle, effective management
India’s handling of the crisis may not receive widespread recognition. There were no blackouts, no rationing queues, no emergency parliamentary sessions, and no televised declarations of distress.
Yet for policymakers and corporate leaders navigating a world where geopolitical volatility is the norm, the model is worth examining. It rests on three foundations: regulatory systems designed to function under stress, diplomatic relationships built for resilience rather than convenience, and supply chains diversified enough to absorb shocks without fracturing the economy.
None of these can be assembled in haste. They require sustained investment and institutional commitment—often during periods when the returns remain invisible.
(The author is founder of Rastogi Chambers and veteran lawyer)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.
TOPICSEnergyThis article was first uploaded on April seventeen, twenty twenty-six, at fifty-two minutes past five in the evening.