India gas shortage helps drive California’s $6 gasoline prices

A cooking-gas crunch in India is feeding into California pump prices through a chain that runs from Middle East fuel flows to refinery output and then into the state’s specialized gasoline market. India’s shortage of liquefied petroleum gas has forced refiners to favor household cooking fuel over alkylates, a key blending component, just as California motorists have been paying about $6 a gallon and the U.S. average has stood near $4.52.

The bottleneck starts with LPG. More than 90% of India’s LPG imports came from the Middle East before the Iran conflict tightened supply, and the near-closure of the Strait of Hormuz cut off importers from around one-fifth of global oil supply that moved through the waterway. With cooking-gas cylinders in short supply, some Indians have queued for hours and turned to black-market buying, pushing policymakers to protect domestic LPG deliveries even if that means sacrificing exports of other fuels and fuel ingredients.

That tradeoff matters in California because alkylates help produce gasoline that meets the state’s strict emissions rules. California’s Reformulated Gasoline program set stringent standards for fuel sold in the state, and the California Air Resources Board says the program was phased in to reduce emissions. When Indian refiners divert LPG feedstock toward domestic cooking gas, they make less alkylate, reducing a supply California depends on more than many other states. Mason Hamilton, chief economist at the American Petroleum Institute, said India’s constrained LPG supply was causing refiners to produce and export less alkylate, adding pressure to an already tight California gasoline market.

The policy response has already begun to move. The U.S. Environmental Protection Agency said on April 30 that it extended federal enforcement relief on state-level fuel controls for an additional 20 days, effective May 4 through May 23. In California, Governor Gavin Newsom signed AB 30 on October 2, 2025, allowing E15 gasoline to be sold while the state studies its environmental impact. Those steps show how fuel officials are already loosening rules in response to high prices, even before any broader waiver of state requirements is considered.

The deeper significance is that the shock is no longer confined to crude oil headlines. A shortage that began with cooking fuel in India has rippled into specialty gasoline components, refinery decisions and California’s price at the pump, showing how tightly linked today’s energy markets have become when one part of the system breaks.