Why Iran war has forced India to bring kerosene back to the kitchens

Kerosene, once widely subsidised and used in India, was phased out with LPG expansion; now, amid global supply disruptions, the fuel is making a temporary return to households

India’s decades-long effort to phase out the use of kerosene, once the lifeline of household energy, has been abruptly brought to a halt.

 

In a rare move, the Ministry of Petroleum and Natural Gas has temporarily relaxed petroleum safety and licensing rules, allowing the distribution of kerosene through retail outlets, including petrol pumps in 21 states and Union Territories (UTs) for 60 days.

 

The decision comes amid global supply disruptions linked to the ongoing war between the US, Israel, and Iran, which has strained LPG (liquefied petroleum gas) logistics and raised energy security concerns.

 

Under the notification, the government has allowed oil companies to store up to 2,500 litres of kerosene per retail unit and distribute it for cooking and lighting.

   

However, this emergency rollback poses a deeper question of how kerosene, which was once essential as a domestic energy source, became obsolete, only to resurface in a crisis.

Why was kerosene once India’s lifeline household fuel?

For decades after Independence, kerosene was central to India’s energy economy. It was widely used for both cooking and lighting by rural and low-income households, especially before LPG and reliable electricity became widespread. Many families depended on kerosene stoves for meals and lamps for illumination, making it an integral part of everyday life.

 

The fuel was distributed among 160 million households (around 800 million people) by the government through the Public Distribution System (PDS) for cooking and lighting purposes, according to the Ministry of Petroleum & Natural Gas.

 

The government heavily subsidised kerosene to ensure affordability, particularly for poor households lacking access to cleaner fuels.

What led to the decline of kerosene in India’s energy system?

Over time, India’s kerosene distribution system, built around heavy subsidies and the public distribution system, began to show structural weaknesses.

 

Rising subsidy burden

 

By the early 2000s, kerosene was one of the most heavily subsidised petroleum products in India, with the government bearing a large share of the cost to keep it affordable for households.

 

Reports show that kerosene subsidies accounted for government spending of about 0.01 per cent of GDP in 2010–11. Even in more recent years, before being phased down, the centre continued to incur substantial expenditure, and the subsidy bill ballooned as global crude prices rose. For example, the kerosene subsidy stood at ₹7,339 crore in 2015–16, before declining to ₹3,259 crore in 2020–21 as allocations were reduced, and then to zero in 2022–23, according to the ministry’s annual budget documents.

 

Diversion and black marketing

 

One of the major concerns with subsidised kerosene was that a substantial amount of it did not reach the intended beneficiaries.

 

Research and government-related studies show that there was widespread diversion of PDS kerosene into the black market, with estimates suggesting that around 40–45 per cent of PDS kerosene was diverted.

 

Inefficiency and leakages

 

Beyond diversion, the broader PDS system suffered from systemic inefficiencies that affected kerosene distribution.

 

Government and independent studies highlighted:

• Poor targeting of beneficiaries, with ineligible households often receiving supplies
• Weak monitoring and outdated beneficiary databases

How did policy shift drive the phase-out of kerosene?

By the mid-2010s, the Government of India started to systematically reduce its dependence on kerosene in the following ways:

• By cutting allocations to states
• By launching Direct Benefit Transfer (DBT) pilots for kerosene
• By persuading states to voluntarily scrap the quota system

As a result, states such as Delhi have scrapped the supply of kerosene.

How did LPG expansion under Ujjwala change household energy use?

The turning point in the decline of kerosene use in the country came with the rapid growth in LPG access, which transformed the way in which households’ energy needs were fulfilled.

 

The launch of the Pradhan Mantri Ujjwala Yojana (PMUY) in 2016 marked a major policy shift. The scheme was designed to provide LPG connections to women from poor households on a subsidised basis, reducing their dependence on conventional fuels such as kerosene and firewood.

 

Since its rollout in 2016, the scheme has provided over 105.7 million LPG connections to beneficiaries, as of February 23, 2026, according to the PMUY dashboard.

 

The growth in LPG access was accompanied by efforts to improve LPG distribution networks, improve last-mile delivery, and promote sustained usage.

 

As LPG coverage widened, the use of kerosene began to decline rapidly. Some states began to reduce their allocations towards kerosene, with some considering stopping the distribution of kerosene completely.

How sharply have kerosene production and consumption declined?

According to the Ministry of Statistics and Programme Implementation’s India Energy Statistics 2025, India’s kerosene economy has shrunk considerably in recent years, with production reducing by 83 per cent from FY17 to FY24. Production fell from around 6 million metric tonnes to almost 1 million metric tonnes.

 

Consumption reduced even more, from 5.30 million metric tonnes in 2017 to merely 0.30 million metric tonnes in 2024. This is a reduction of around 94 per cent.

 

This transition was also driven by growing evidence on the health risks of indoor air pollution caused by traditional fuels, reinforcing the need for faster adoption of cleaner alternatives.

 

This shift led to a policy focus on:

• Subsidising a non-polluting fuel instead of a polluting fuel
• Moving from kerosene to LPG
• Moving from mere survival to better health, safety, and dignity, particularly for women

The growth in LPG access, therefore, was not just about replacing kerosene with LPG, it was about redefining the link between household energy use and public well-being.

Why is kerosene making a temporary comeback in India now?

The revival of kerosene in India’s energy mix is linked to geopolitical tensions in West Asia, which have disrupted global fuel supply chains and created uncertainty in the availability of petroleum products. The government is trying to reduce pressure on LPG.

 

Although LPG continues to be the primary cooking fuel in most households, disruptions in fuel supply have prompted the government to take measures to ensure that the energy requirements of households, particularly for cooking and lighting, are not adversely affected.

 

The petroleum and natural gas ministry has introduced temporary measures to ease the fuel supply situation in the country. These include:

• Relaxation of kerosene distribution norms, allowing greater flexibility in storage
• Retail-level distribution of kerosene through petrol pumps
• Use of PDS stock-keeping units (SKU) to supply kerosene to specific states and UTs

These measures are aimed at providing short-term safeguards and draw on an existing but largely phased-out system, enabling the government to quickly deploy an alternative fuel option in times of crisis.

 

“This is a classic energy security move. In times of crisis, governments fall back on legacy systems that still exist. And even though bringing back kerosene addresses the immediate energy crisis, it also raises concerns around indoor air pollution. But putting everyone on electric sources of energy also comes with challenges, as a large number of people cooking together will put pressure on the grid. The temporary return of kerosene signals that, on one hand, India retains fallback options, but, on the other hand, it also highlights underlying vulnerabilities. We still need to build systems that can withstand disruptions without reverting to sources that were phased out,” says Binit Das, programme manager in the Renewable Energy unit at the Centre for Science and Environment (CSE) in New Delhi.

 

Kerosene’s story in India is not merely the journey of a fuel, but of the country’s broader economic and policy transition. From a period of scarcity, when subsidised distribution was essential, to years of reform aimed at reducing financial burden and leakages, and shifting towards cleaner energy and sustainability targets, to now, when it reappears as a temporary fallback in response to external shocks.