West Asia war: Refiners asked to maximise LPG output for local consumption

Facing supply risks from the West Asia conflict, the government has ordered all refiners to channel full C3-C4 streams into LPG production to ensure adequate supply for households

As India struggles to secure liquefied petroleum gas (LPG) supplies amid the ongoing war in West Asia, the government has directed all refineries operating in the country to use entire C3 and C4 streams, including propane, butane, propylene and butenes, for LPG production. The additional LPG or cooking gas produced will be used solely for domestic consumers.

 

The oil companies also include special economic zone (SEZ) refineries and petrochemical complexes, according to a revised government order dated March 9.

 

The LPG produced by all domestic companies would be supplied to the three state-run oil marketing companies (OMCs), namely Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). IOC, BPCL and HPCL collectively supply more than 99 per cent of India’s domestic LPG.

 

“All oil refining companies, including their petrochemical complexes, shall not divert, utilise, process, crack, convert or otherwise employ any of the streams as mentioned above for manufacture of petrochemical products or such downstream derivatives,” the order said.

 

The new order supersedes the government’s previous order dated March 5, 2026, and will remain in effect until further instructions. The revised order broadens the scope from only propane and butane to C3 and C4 streams, including propane, butane, propylene, butenes and other gases for LPG production.

 

A top government official said the move has been taken to ensure availability of cooking gas for domestic consumers in India. The Indian government would prioritise domestic consumers over commercial and industrial users, such as hotels and restaurants, the official said.

 

“We are in a war situation. Commercial LPG users may be impacted. Other measures to ensure supplies to domestic consumers are in force,” the official said.

 

Meanwhile, the lock-in period, or the time period for making fresh bookings for LPG cylinders from the last delivery, has been increased to 25 days from the earlier 21 days to prevent hoarding, the official said.

 

Last week, the OMCs had increased prices of domestic LPG by ₹60 per cylinder and commercial LPG by ₹114.5 per cylinder across the country. India procures around 85 per cent of its LPG imports from West Asian countries, which transit through the Strait of Hormuz.

 

The government said any contravention of the order issued on Monday would attract action under the Essential Commodities Act, 1955, and the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.