LPG supply under strain? Govt orders refineries to boost output, prioritise households

The government has directed oil refineries to increase production of liquefied petroleum gas (LPG) and prioritise its supply to households amid geopolitical disruptions affecting fuel availability, the Ministry of Petroleum and Natural Gas said on Monday.

In a post on X, the ministry said it has issued orders to refineries to boost LPG output and divert the additional production for domestic household consumption.

“In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, the ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use,” it said.

The ministry said that domestic LPG supply to households has been prioritised and a 25-day inter-booking period has been introduced to prevent hoarding and black marketing.

“Non domestic supplies from imported LPG is being prioritised to essential non domestic sectors such as Hospitals and Educational institutions,” it added.

Meanwhile, the hospitality and restaurant industry bodies flagged shortages of commercial cooking gas cylinders and sought government intervention.

The Federation of Hotel and Restaurant Associations of India (FHRAI) on Monday wrote to Petroleum and Natural Gas Minister Hardeep Singh Puri highlighting “widespread disruption at the ground level”.

In its letter, FHRAI Secretary General Jaison Chacko said several LPG distributors were withholding supplies citing a government order dated March 5.

“In light of these challenges, we request the government to issue a formal clarification confirming that no such restrictions apply to the hospitality and food service sectors,” the body said, seeking a clear mandate to oil marketing companies to ensure seamless distribution of commercial cylinders.

The National Restaurant Association of India (NRAI) also said commercial LPG suppliers were expressing inability to meet demand from restaurants, which it said was severely affecting the sector.

“As per news articles, the government has clarified that there is no ban on supply of commercial LPG cylinders for the restaurant industry. However, the ground situation is different, with suppliers expressing inability to supply the same,” the association said in a post on X.

The ministry said a three-member committee comprising executive directors of oil marketing companies (OMCs) has been formed to review requests for LPG supplies for commercial users such as restaurants, hotels and industries.

The supply concerns come amid escalating geopolitical tensions in West Asia that have disrupted global oil and gas flows.

Strikes on energy infrastructure and risks to shipping through the Strait of Hormuz, a key maritime chokepoint, have affected the movement of oil and liquefied natural gas (LNG) from the Persian Gulf.

Operations at Qatar’s Ras Laffan LNG terminal, the world’s largest LNG export facility, were also disrupted following a drone strike.