After the supply was affected due to the crisis in the Middle East, the Government of India, using emergency powers, has ordered oil refineries to increase the production of Liquefied Petroleum Gas (LPG) so that there is no shortage of domestic cooking gas.
LPG consumption and import in India
India is the second largest LPG importer in the world. Last year, about 33.15 million metric tons of cooking gas was consumed in the country. LPG is a mixture of propane and butane gas. About two-thirds of the country’s total LPG requirement is met by imports and about 85–90% of this supply comes from the Middle East.
Refineries ordered to increase production
In the government order, it has been said that all the oil refineries should make maximum use of the propane and butane available with them in making LPG. Also, producers have been asked to make LPG, propane and butane available to government refineries so that supply continues to reach homes.
Supplies will be given to these companies
The government has said that gas supply should be given mainly to government oil companies, Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, which will deliver it to domestic consumers. According to government data, there are about 33.2 crore active LPG consumers in the country. Import of LPG from America to India has started from January. Indian public sector oil companies have signed a one-year contract in November 2025 to import about 2.2 MT per annum of LPG from the US Gulf Coast for the contract year of 2026.
Petrochemical companies may be affected
Using propane and butane to make LPG may reduce the production of some petrochemical products. These also include alkylates, which are mixed in petrol. Companies like Reliance Industries have been exporting several cargoes of alkylates every month.
Ban on petrochemical production also
The government has also instructed refineries not to use propane and butane in petrochemical production and give priority to making them LPG. According to trade sources, using propane and butane to make LPG can affect the profits of petrochemical companies, because the price of products like polypropylene and alkylates is higher than LPG.
