Ministry of Petroleum and Natural Gas officially directed all Indian oil refineries to maximize LPG production to safeguard the country’s domestic cooking gas supply. This directive comes as the Iran-Israel-US conflict and the subsequent blockade of the Strait of Hormuz have disrupted nearly 60% of India’s LPG imports.
To manage the crisis, the government has invoked emergency powers under the Essential Commodities Act (ECA), 1955, prioritizing household needs over industrial and commercial sectors.
Key Mandates for Refineries
The government has issued specific technical and operational orders to both public and private sector refiners (including Reliance and Nayara):
- Feedstock Diversion: Refineries must utilize all available propane and butane streams—the primary components of LPG—exclusively for cooking gas production.
- Petrochemical Curb: The order strictly prohibits diverting these streams for the manufacture of non-essential products like polypropylene or other petrochemical derivatives until further notice.
- 10% Production Boost: Early reports from Wednesday, March 11, indicate that refineries have already ramped up LPG output by approximately 10% following these directives.
- 100% Capacity: All domestic refineries are currently operating at 100% capacity to bridge the import gap.
New Distribution & Booking Rules
To prevent panic buying and black marketing, the Ministry has introduced several temporary restrictive measures:
| Policy | New Rule (Effective March 2026) |
| Inter-Booking Period | The minimum gap between two domestic refills has been increased from 21 days to 25 days. |
| Priority Sector I | 100% of newly produced LPG is earmarked for domestic households, Piped Natural Gas (PNG), and CNG for transport. |
| Commercial Rationing | Supplies to hotels and restaurants have been deprioritized, leading to widespread shutdowns in major metros. |
| Essential Exemptions | Imported LPG is being rerouted specifically to hospitals and educational institutions. |
The “ED Committee” for Industry
Acknowledging the distress in the hospitality sector—where nearly 20% of restaurants in Mumbai have already partially closed—the government has formed a special committee.
- Composition: Three Executive Directors (EDs) from Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL).
- Role: This panel will review urgent representations from hotel associations and industries to provide “emergency allocations” where food security or critical operations are at risk.
Current Supply Outlook
Despite the crisis, the government maintains that India has a 25-day inventory of LPG. Government sources on March 11 stated that the situation is “under control” as India aggressively explores non-Hormuz supply routes, including a major deal to import 2.2 million tonnes of LPG from the US Gulf Coast.
