AC Makers Face Cost Surge as LPG Crunch Disrupts Supply

India’s air conditioner industry is heading into the summer season with growing concerns over rising costs and supply challenges, as a shortage of liquefied petroleum gas (LPG) begins to affect production.

LPG plays a key role in the manufacturing process of air conditioners, especially in tasks like brazing copper components. With supplies tightening due to global supply disruptions—largely linked to tensions in West Asia—manufacturers are finding it harder to secure the fuel they need. This comes at a crucial time, when companies are preparing to meet the usual spike in demand during the hotter months.

Industry experts say the shortage is not just about availability but also about rising costs. Since India energy imports remain high, any disruption in global supply chains tends to push prices higher. As a result, AC manufacturers are now dealing with increased production expenses, forcing them to rethink pricing and operations.

The impact is already visible across the sector. Some companies are facing delays in sourcing materials, while others are exploring alternative options to keep production running. However, substitutes for LPG in certain manufacturing processes are limited, making it difficult to fully offset the problem. If the situation continues, it could lead to slower production or AC supply shortages in the market.

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Adding to the pressure, the cost of other key raw materials, such as copper, has also gone up. Together, these factors are squeezing profit margins and pushing companies to pass on at least part of the cost increase to consumers. This means buyers may see AC price hike trends this summer.

At the same time, demand remains strong. Rising temperatures, frequent heatwaves in India, and growing awareness about cooling solutions are expected to drive summer AC demand. However, the current supply challenges could make it harder for companies to fully meet this demand.

With summer approaching quickly, the industry is trying to balance strong consumer demand with uncertain supply conditions—raising the possibility of higher prices and limited availability in the coming months.