India’s Ministry of Petroleum and Natural Gas invoked emergency powers Monday, ordering all refineries to maximise LPG production from propane and butane streams exclusively for household cooking amid West Asia conflict disrupting 85-90% of imports through the blockaded Strait of Hormuz. With 33 crore active LPG connections at risk, domestic use trumps commercial sectors like hotels and restaurants now screaming shortage, while a three-member committee reviews non-domestic allocations.
Why Domestic LPG Production Suddenly Became National Priority
India consumed 31.3 million tonnes LPG in 2024-25 but produced just 12.8 million tonnes domestically, importing the rest—mostly via Hormuz now sealed by Iran war. In order to avoid profitable petrochemicals like Reliance Industries’ alkylate exports, MoPNG’s March 5 regulation requires public and private refiners to convert all propane and butane to LPG. Households get 25-day inter-booking gaps to crush hoarding; penal action awaits violators.
In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use.
The ministry has prioritised domestic LPG supply to…
— Ministry of Petroleum and Natural Gas #MoPNG (@PetroleumMin) March 9, 2026
How Are Hotels and Restaurants Hit Hardest by Rationing
FHRAI urgently petitioned Minister Hardeep Singh Puri over “widespread disruption” in commercial cylinder supply, with NRAI reporting suppliers’ “inability to supply restaurants.” Non-domestic LPG shifts to essential sectors—hospitals, schools—while imports prioritise critical needs. Three OMC executive directors now monitor restaurant/hotel allocations as FHRAI demands formal clarification exempting hospitality.​
What Skyrocketing Prices Triggered the Crisis Measures
14.2kg domestic cylinders jumped Rs 60 March 7—first hike since April 2025—pushing Delhi price to Rs 913. Commercial 19kg LPG suffered second weekly increase of Rs 115, compounding February’s Rs 48-50 rise. Global crude’s 36% Iran-war surge plus Hormuz blockade left LPG carriers stranded, forcing ESMA powers akin to post-Ukraine export bans.
​How Is India Diversifying LPG Away From Gulf Dependency
Public sector OMCs locked 2.2 million tonnes US Gulf Coast imports for 2026—10% of annual needs—diverting from conflict zone reliance. Natural gas prioritisation shields CNG, fertiliser, kitchens from cascade failures. Surplus refining capacity converts to LPG lifeline for 33.08 crore consumers as alternative cargoes arrive.
FAQs
Q: Why prioritise household LPG over commercial use?
A: 33 crore connections at risk; domestic cooking trumps hotels per MoPNG emergency order.​
Q: How much LPG does India import vs produce?
A: 31.3M tonnes consumed 2024-25; only 12.8M tonnes domestic, rest imported (85-90% Hormuz).
Q: What price hikes hit LPG cylinders recently?
A: 14.2kg +Rs 60 (Rs 913 Delhi); 19kg +Rs 115 second weekly jump.​
Q: Who monitors commercial LPG now?
A: Three OMC executive directors review restaurants/hotels supply.
Disclaimer: This information is based on inputs from news agency reports. TSG does not independently confirm the information provided by the relevant sources.​
