India’s gas allocation framework prioritises fertilisers, city gas, and transport, leaving power, refining, and petrochemicals more exposed to supply curtailments, according to the global energy analytics firm.
Asian markets are deploying a range of strategies to cope with liquefied natural gas (LNG) supply disruptions from the Middle East, according to S&P Global Energy, a leading energy analytics firm. Tightened availability has forced countries to adjust through demand destruction, fuel switching, and alternative sourcing, with responses varying across regions.
“In South Asia, demand destruction is expected to occur through a combination of rationing, fuel switching, and slower economic growth,” S&P Global Energy noted. “This reflects the region’s structurally lower ability to afford gas at elevated prices, compounded by a higher reliance on LNG supply from the Persian Gulf that has increased the relative scale of the disruption.”
In India, the government’s gas allocation framework prioritises fertilisers, city gas for residential and commercial use, and transport. “Power generation, refining, and petrochemicals are less prioritised and are therefore more exposed to curtailments if available supply is redirected to these priority sectors,” the firm added.
In Pakistan and Bangladesh, the power sector is forecast to rely more heavily on coal, fuel oil, and diesel generation, while industrial consumers face intermittent outages amid reduced gas availability.
By contrast, “China’s demand response is driven primarily by fuel switching, with macroeconomic effects playing a secondary role,” S&P Global Energy said. “The market has been able to avoid physical LNG shortages or rationing. China’s relatively low exposure to LNG from the Persian Gulf as a percentage of its total gas demand allows the system to absorb supply disruptions through gas‑to‑coal switching in the power sector, particularly in coastal provinces where coal capacity and inventories remain adequate.”
Southeast Asia exhibits a more heterogeneous demand response, with outcomes varying significantly by market. Even in price‑sensitive economies, demand destruction is expected to be gradual and partial compared with South Asia, underscoring the region’s relative resilience.