LPG Distribution: Aegis Logistics Bets Higher Margins Will Outlast War-Led Price Spike
The LPG Distribution business delivered exceptional profitability for Aegis Logistics during FY26 as its gas distribution margin nearly doubled from around Rs 4,000 to Rs 7,000 per tonne. While the war-driven energy market played a significant role, management believes LPG Distribution margins can remain strong even after prices stabilise. This Indian Petroplus analysis explores whether that confidence is justified.
Management attributed the higher margin to two factors: stronger volumes and improved pricing during the West Asia disruption. Distribution volumes increased sharply from nearly 5.2 lakh tonnes to about 7.5 lakh tonnes, improving procurement efficiency and purchasing power. At the same time, volatile LPG prices created wider distribution spreads for companies capable of securing reliable supplies.
Looking ahead, Aegis plans to expand gas distribution volumes to nearly two million tonnes by FY28 through LPG and ammonia businesses. Expansion across South India, diversified sourcing from countries including the US, Canada and Nigeria, and partnerships with global players are expected to strengthen long-term competitiveness.
The biggest challenge remains the transition period. If geopolitical tensions ease before targeted volumes are achieved, margins may come under pressure. Future quarterly results will reveal whether scale can compensate for declining war-related pricing benefits.
According to Indian Petroplus analysis, the outlook for LPG Distribution will depend less on geopolitical disruptions and more on Aegis Logistics' ability to sustain volume growth and procurement efficiency.
