LPG Cylinder Crisis Hits India? Here’s Why Govt Invoked Essential Commodities Act Amid Middle East War

LPG Cylinder: The Central government has invoked the Essential Commodities Act (ECA) to ensure an uninterrupted supply of domestic cooking gas across India. In a late-evening directive issued on Monday, the Ministry of Petroleum and Natural Gas ordered refineries and petrochemical units to maximise the production of liquefied petroleum gas (LPG) and divert key hydrocarbon streams to the LPG pool.

Refineries Asked To Divert Key Hydrocarbon Streams

Under the order, refiners have been directed to channel the entire output of C3 and C4 hydrocarbon streams, including propane, butane, propylene and butenes, towards LPG production.

These streams must be supplied exclusively to the country’s three state-run oil marketing companies (OMCs): Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. Together, these companies handle nearly the entire distribution of domestic LPG in India.

The ministry has also barred refineries and petrochemical complexes from diverting these hydrocarbon streams for petrochemical production or other downstream uses. The move is aimed at prioritising LPG availability for households.

LPG Supply To Be Reserved For Domestic Consumers

In its order, the ministry emphasised that LPG is an essential domestic fuel widely used by households across the country and that ensuring uninterrupted supply is necessary in the public interest.

Oil marketing companies have also been instructed to ensure that LPG sourced under this arrangement is supplied only to domestic consumers.

The directive replaces an earlier order issued on March 5 and will remain in effect until further notice, the ministry said.

Hotel Associations Report Commercial LPG Shortages

The development comes as several hotel associations across India reported shortages of commercial LPG cylinders. The shortages surfaced only days after the prices of both commercial and domestic gas cylinders were increased nationwide.

Hotel associations in Bengaluru and Chennai flagged supply disruptions, warning that restaurants in their respective cities could be forced to halt operations on Tuesday, March 10, if LPG supplies were not restored.

The Chennai Hotels Association and the Bangalore Hotels Association on Monday said commercial LPG supply to restaurants in both cities had been severely affected.

The association also warned that any disruption in hotel operations could impact common people, students and medical professionals who rely on restaurants for daily meals.

Restaurant Industry Seeks Government Intervention Over LPG Cylinder Crisis, Shortage Reports From Gurugram And Mumbai

The National Restaurant Association of India (NRAI) has also urged the government to intervene, cautioning that prolonged supply disruptions could have serious consequences for the industry.

Apart from Bengaluru and Chennai, restaurants in Gurugram and Mumbai have also reported shortages of commercial LPG cylinders. Some establishments are already exploring alternative arrangements to sustain operations.

Global Oil Tensions Add To LPG Supply Concerns

The situation comes amid a rise in global oil prices linked to the ongoing conflict between the United States and Iran, which has fuelled unrest across the Middle East.

Concerns have also intensified after Iran targeted the Strait of Hormuz, a crucial maritime route through which nearly one-fifth of the world’s oil supply is transported. Any disruption in this shipping lane could trigger further spikes in energy prices.

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