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Informist, Monday, Mar. 9, 2026

 

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--Govt source: To prioritise CNG for domestic use over commercial purposes 
--Govt source: To ensure price of domestic piped gas doesn't rise 
--Govt source: Ordered all refineries to maximise LPG production 
--Govt source: Scouting more nations for importing LPG 
--Govt source: In touch with Canada, US, Australia for importing LPG 
--Govt source: Few LPG deliveries from US, Canada, Australia in progress 
--Govt source: Told oil cos to prioritise LPG production over other products

 

NEW DELHI – Amid the supply disruption caused by the continuing military conflict in West Asia, the government has issued a fresh order to refineries to prioritise the production of liquefied petroleum gas for household consumption, a top petroleum ministry official said Monday. The refineries have been told to halt the manufacture of other products if need be.

 

This is the second such order to refiners. Thursday, the government had asked them to prioritise the use of propane and butane for domestic LPG rather than for petrochemical production. LPG is a combination of propane and butane.

 

The development comes as India faces supply constraints after Israel and the US launched joint military strikes on Iran on Feb. 28, prompting Tehran to hit back at the Jewish state and at US military installations around the Persian Gulf.

It also shut the Strait of Hormuz, a narrow waterway that connects the Gulf to the Arabian Sea and the Indian Ocean, resulting in a sharp rise in prices of crude oil and natural gas.

 

A fifth of global crude oil supply flows through the Strait of Hormuz. About half of India's crude oil imports--primarily from Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait--also pass through the strait, making the country particularly vulnerable to shipping bottlenecks there and to surging freight and insurance rates.

 

India imported large volumes of LPG from West Asia in 2025, representing 46.9% of its LPG imports. LPG remains the primary cooking fuel for millions of households and any disruption could quickly affect its availability. According to the official, 40% of India's LPG supply comes through the Strait of Hormuz, and an equivalent quantity is now being arranged from other sources. "India is scouting for more LPG," the official said. India is also "doubling its effort" to import LPG from sources not in the Gulf region, the official added.

 

India has already signed a one-year structured contract to import around 2.2 million tonnes per annum of LPG from the US Gulf Coast for 2026, translating to 10% of LPG used domestically. The government is also in touch with Canada, Algeria, Australia, and a few other nations to import LPG. Some deliveries from these regions are already in progress, the official said. 

 

Despite the rapid diversification drive to ensure energy security, the official said, oil marketing companies have also issued orders to dispatch a second cylinder for household use after 25 days of booking, instead of 21 days earlier. This will prevent hoarding and panic buying, the official said. 

 

With the military conflict continuing, Brent crude oil price touched $119.50 per barrel Monday, the highest since June 2022. Saturday, Indian Oil Corp. Ltd. increased the price of domestic and commercial LPG cylinders sold under its "Indane" brand across metropolitan cities by INR 60 per cylinder. Given the situation, there is concern in many quarters about whether there will be a further increase in domestic fuel prices.

 

While LPG is the most widely used household cooking fuel in India, the official said the government will also ensure that compressed natural gas prices will not be hiked. "Domestic users' cost of CNG--through pump or city gas distribution--will not go up," the official said. As in the case in LPG, if push comes to shove, the government will prioritise pricing and supply of CNG used for household purposes over commercial use.

 

"If a decision needs to be made, domestic users will be given priority," the official said, but added that the commercial sector does not need to worry as of now because India has both adequate supply and stock.  End

 

US$1 = INR 92.32

 

Reported by Priyasmita Dutta

Edited by Rajeev Pai

 

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