Adani Total Gas hikes industrial gas prices amid Middle East conflict
Adani Total Gas has significantly increased prices for industrial clients due to reduced gas availability stemming from the Middle East conflict, citing upstream gas curtailment and operational constraints impacting LNG supply routes. The price for gas exceeding 40% of the daily contract quantity has risen to ₹119 per standard cubic meter, a substantial increase from the previous rate of approximately ₹40 per standard cubic meter. This price hike is a direct consequence of disruptions in shipping through the Strait of Hormuz, a critical energy transit route.
Key Highlights
- Adani Total Gas increased industrial gas prices significantly.
- The price hike is attributed to Middle East conflict and supply disruptions.
- Gas prices for excess usage now ₹119/scm, up from ₹40/scm.
- Strait of Hormuz transit disruptions are the primary cause.
- This impacts industries reliant on gas for operations.
Adani Total Gas Limited (ATGL) has implemented a substantial price increase for natural gas supplied to its industrial customers, particularly for volumes exceeding their contracted daily limits. The price for gas consumed above 40% of the daily contract quantity has been raised to ₹119 per standard cubic meter (scm), a sharp escalation from the previous rate of approximately ₹40 per scm. This significant hike, which took effect from Tuesday, March 4, 2025, is directly linked to the escalating geopolitical tensions in the Middle East and the resulting disruptions to global liquefied natural gas (LNG) supply routes.
The company cited "upstream gas curtailment, leading to operational constraints" as the reason for the price adjustment. The ongoing conflict involving Iran and retaliatory military strikes in the region have severely impacted shipping movements through the Strait of Hormuz, a vital maritime corridor between Iran and Oman. This strategic waterway is responsible for carrying approximately one-fifth of the world's oil consumption and substantial volumes of LNG. Reports indicate that vessel traffic through the Strait has slowed to a near halt following incidents where several ships operating in the area were struck.
This disruption has created a supply squeeze and driven up global LNG prices. According to S&P Global Energy, the Platts JKM benchmark, a key indicator for spot LNG prices in Northeast Asia, saw a dramatic surge, rising by 41% to $15.068 per million British thermal units (MMBtu) on March 2, 2025, and further jumping 70% to around $25/MMBtu on March 3, 2025. This marks the largest daily increase since March 2022. For India, which relies heavily on LNG imports, particularly from Qatar and the UAE, these tensions pose significant risks to its energy security. Approximately 59% of India's LNG supply and nearly 29% of its total gas supply come from Qatar and the UAE, making the country vulnerable to disruptions in shipping routes through the Gulf.
As a consequence of these supply constraints and price escalations, other Indian companies like Petronet LNG Ltd. and Gujarat Gas Ltd. have also invoked force majeure clauses, indicating their inability to secure scheduled shipments. The price increase by Adani Total Gas is expected to put pressure on margins for energy-intensive sectors such as ceramics, glass, and chemicals. The company's joint venture structure with French oil major TotalEnergies SE is highlighted as a mechanism that could enhance risk mitigation capabilities during such supply disruptions. The news was published on March 5, 2026..
Frequently Asked Questions
Why has Adani Total Gas increased its industrial gas prices?
Adani Total Gas has increased prices due to reduced gas availability stemming from the Middle East conflict, which has disrupted LNG supply routes and caused upstream gas curtailment.
What is the new price for industrial gas?
The price for industrial gas consumed above 40% of the daily contract quantity has been raised to ₹119 per standard cubic meter (scm).
What caused the supply disruptions?
The disruptions are attributed to the ongoing conflict involving Iran and retaliatory strikes in the Middle East, which have impacted shipping through the critical Strait of Hormuz.
How does this price hike affect Indian industries?
The price hike is expected to increase operational costs for industries reliant on gas, potentially putting pressure on profit margins for sectors like ceramics, glass, and chemicals.