LPG demand doubles, market goes into black as Kolkata resorts to panic buying

Kolkata: Rising tensions in West Asia has led to panic buying of LPG cylinders in Kolkata, creating an opportunity for black-market operators who are selling cylinders — including those meant for poor households under the Pradhan Mantri Ujjwala Yojana (PMUY) — at steep premiums.

Oil industry data shows a sharp surge in bookings over the past week as consumers rushed to secure supplies amid fears of shortage. According to sources in the oil sector, bookings for Indian Oil Corporation (IOC) cylinders within 48 hours rose from 2.5 lakh on March 5 to 5.8 lakh on March 9.


When figures from all oil marketing companies are combined — including Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd — bookings increased from 3.9 lakh to over 7.5 lakh in the same period.

The spike far exceeds normal demand levels. On average, the state requires around 5 lakh LPG cylinders daily, of which IOC supplies more than 3 lakh, while BPCL and HPCL together account for the remaining demand.

The surge in bookings strained the supply chain and enabled illicit traders to flourish, particularly on Kolkata's outskirts. Some delivery personnel are also reportedly exploiting the situation by encouraging households to book additional cylinders, even if it is not required immediately, and diverting them to the black market at higher prices.

Cylinders meant for beneficiaries of welfare schemes are also being illegally sold. In the Azadgarh area in south Kolkata, a 3-kg LPG cylinder is being sold in the black market for over Rs 460, much above the official price.

A trader dealing in the grey market said supply was erratic. "I received 11 small cylinders on Monday and seven-eight on Tuesday. Both days, the stock sold out before noon," he said. The dealer said he bought the cylinders for about Rs 376 each and each was selling for Rs 400, but prices were likely to increase as supply tightened. "The official price went up by about Rs 60. But shopkeepers are charging different amounts, often more than the official hike as supply has dropped," he added.

Industry sources said though supply disruptions had remained limited, the wave of panic bookings temporarily destabilised distribution networks, creating an environment in which illegal traders thrived.

Neighbourhoods such as Azadgarh, Bijoygarh and Bikramgarh are populated with students and people from districts living on rent. Without permanent LPG connections, many depend on small cylinders sold through informal networks. Dealers said amid the current shortage, even homes with official connections were turning to the black market to meet immediate needs.

The shortage is also hurting small-time businesses that rely on LPG for daily operations. A fast-food vendor on SN Banerjee Road said she recently paid Rs 3,000 for a 19-kg commercial cylinder that previously cost around Rs 1,900. "After searching for hours, I finally found someone selling a cylinder in the black market. He could arrange for only one. The cylinder will last two days. I don't know how I will run my shop if I can't find another," she said, adding her dealer warned the supply crunch might last three to four more days.

The situation has turned out to be especially unfair for low-income households as they are being forced to either pay inflated prices or risk running out of cooking fuel. A domestic help said she was told to pay Rs 1,200 for a cylinder delivered within 24 hours through unofficial channels after she failed to secure one through the regular booking system. "We struggle every day just to make ends meet. Cooking gas is essential. Are poor families supposed to go back to earthen stoves?" she said.

Even households that normally use LPG sparingly are now trying to secure additional cylinders. Srabanti Dutta (27), a private nurse renting a room in Bijoygarh, said a cylinder usually lasted her nine to 10 months but she still booked a new cylinder though only three months had passed since her last refill. "My landlord advised me to book immediately as there might be shortages. I didn't want to take a risk," she said. Aritra Chakraborty, a tenant in Tiljala without a formal LPG connection, said the informal supplier he depended on had increased the price. "I used to pay around Rs 1,000 for a cylinder that lasted four months. Now, he is asking for Rs 1,500," he added.

(With inputs from Krishnendu Bandyopadhyay, Udit Prasanna Mulherji, Tamaghna Banerjee, Priyanka Dasgupta, Sristi Lakhotia)