The recent LPG price surge exposes why resilient strategies for clean cooking are a must

The current LPG price peak: a stress test for clean cooking systems 

Since late February 2026, global liquefied petroleum gas (LPG) markets have encountered a sharp and significant increase in prices, primarily driven by escalating conflict in the Middle East and disruptions to critical energy supply routes. By mid-March, international LPG benchmarks rose dramatically across key hubs like the United States and Asia, signaling heightened price volatility and tighter supply conditions. These shocks quickly affected domestic markets in South Asia, Southeast Asia, and parts of Sub-Saharan Africa. Physical supply issues, including partial closure of the Strait of Hormuz—a pivotal LPG export route—further exacerbated volatility and fears of prolonged shortages. The gap between countries with domestic LPG production and those reliant on imports widened, with conflict-affected regions seeing the greatest price differences in seven years. From February 28 to March 19, the Far East Index (FEI) Propane contract surged by 58%, the European ARA benchmark by 60%, and U.S. propane by 22%.  

Rising LPG prices directly influence household fuel choices. When clean cooking fuel becomes unaffordable, lower-income families often revert to traditional fuels like charcoal and firewood, harmful to their health. Historical price shocks show that such “fuel switching” is common and reverses health, gender, and environmental gains. Price spikes can erode trust in LPG as a clean solution and slow long-term adoption.  

Policy implications: building resilient systems for clean cooking 

Both short-term and long-term mechanisms exist to mitigate the impact of LPG shocks on cooking behavior, including price and supply security measures. These approaches can be expensive and require careful assessment prior to adoption.

Subsidies and price stabilization instruments are often the go-to measures to smooth domestic price fluctuations. World Bank Group analysis shows that broad LPG subsidies are fiscally challenging and hard to sustain during high global prices. Poorly targeted subsidies may not effectively protect the poorest or ensure continued access to clean fuels. This highlights the need for adaptive, targeted support mechanisms that respond to shocks while maintaining market integrity and supply reliability.

LPG price stabilization funds operate via a price band system: when international prices exceed the band, the fund compensates suppliers; when prices are below, contributions are made to the fund. In Peru, the Fuel Price Stabilization Fund (FEPC) was used to shield consumers from global price shocks, but prolonged high prices led to fiscal strain. Thailand uses similar methods, with funds compensating market participants when domestic and international prices diverge. Success relies on sustainable financing and regular adjustments, but implementation can be politically challenging.

At the same time, resilient clean cooking policies need to go beyond addressing fuel prices. To make clean cooking truly reliable, governments also need to ensure a stable and secure fuel supply, as well as a range of technology options that fit different needs. It is also important to align policies across sectors—such as energy, public finance, and social protection—so they work together effectively while keeping costs under control.

Security of supply instruments in LPG includes strategic reserves and a defined set of operational policy instruments to ensure continuous physical availability. These include minimum storage mandates, import diversification, prioritizing domestic production, emergency allocation of powers, and infrastructure redundancy. Few countries, such as Japan and South Korea, have formal strategic reserves; most rely on commercial inventories and robust infrastructure. India relies on production prioritization and emergency allocation, Brazil on import diversification and coastal infrastructure, and Indonesia centralizes imports, storage, and distribution. Overall, supply security rests on logistics, infrastructure, and regulatory intervention, with strategic reserves playing a limited role.

Alternatives to LPG for clean cooking exist and can be encouraged. Electric cooking—enabled by efficient appliances, grid connections, and solar home systems—offers a scalable option to reduce reliance on imported fuels. Biogas provides a decentralized, sustainable solution for rural households, converting organic waste into energy with environmental benefits. To fully realize these alternatives, governments’ clean cooking policies should be technology neutral, allowing multiple solutions to compete based on local needs and preferences, rather than favoring a single fuel or system.

The recent LPG price peak represents a critical stress test for clean cooking strategies. It shows that long-term success requires not just affordability, but availability, expanded choice of solutions, and consumer trust during global instability. Clean cooking transitions are most resilient when policies are built to withstand market volatility and supply disruptions.