LPG Crunch: Govt Sets Up Panel, Prioritises Homes And Essential Services

The National Restaurants' Association of India (NRAI) urged government intervention, warning of a possible “catastrophic closure” of businesses.

Meanwhile, the Pune Municipal Corporation has temporarily shut the city’s gas crematoriums, directing that available propane and butane be prioritised for domestic LPG supply.

Source : PTI

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The central government has set up a grievance-redress committee and taken steps to increase the supply of liquefied petroleum gas (LPG) after reports of shortages of commercial cylinders in several parts of India. The move comes as the ongoing US-Iran conflict disrupts supply chains from West Asia.

Sources told news agency ANI that the three-member committee includes executive directors from public-sector oil companies — Indian Oil, Hindustan Petroleum and Bharat Petroleum Corporation Limited.

Oil Companies Outline Steps

Hindustan Petroleum (HPCL) said in a post on X: “In light of current geopolitical disruptions affecting global fuel supply, steps have been taken to enhance LPG production and prioritise its availability for domestic consumers and essential non-domestic sectors such as hospitals and educational institutions.”

HPCL added that requests from other non-domestic sectors, including hotels and restaurants, will be examined by the committee “based on merit, necessity, and product availability”.

The company also shared three email addresses for submissions regarding essential requirements from other sectors: edlpg@bharatpetroleum.in, indanecareho@indianoil.in, and lpg.sbu.head@hpcl.in.

Sources told ANI that the “genuine requirement of restaurant associations' for commercial LPG will be met and this committee will also re-prioritise the supply as per the requirements”.

Supply Situation And Government Response

Reports citing sources in India Today said domestic LPG production has “increased by 10% in the last few days”, though an official confirmation was not immediately available. “We were in crisis earlier but today we are not in any crisis of petroleum products,” a source told the channel.

At the centre of the supply concerns is the Strait of Hormuz, which Iran is reported to have closed. Government sources said India is now sourcing 70% of its crude oil from routes that do not pass through the strait.

Officials also said there has been no decision to curb exports of refined petroleum products. Oil minister Hardeep Singh Puri has said India has “enough buffer stock” of petroleum products such as LPG.

The Union government has also invoked the Essential Commodities Act to ensure uninterrupted domestic cooking gas supply. Refineries and petrochemical units have been directed to maximise LPG production and divert key hydrocarbon streams to the LPG pool.

Officials said the gap between two domestic LPG bookings has been increased from 21 days to 25 days to “avoid hoarding and prevent black marketing”.

Maharashtra Flags Cut In Commercial Supply

In Maharashtra, state food and civil supplies minister Chhagan Bhujbal confirmed that hotels may face reduced commercial LPG supply.

In a video message, Bhujbal said hotel owners had raised concerns about the supply constraints. “I personally met the chief minister (Devedra Fadnavis) and discussed the situation. There are clear instructions from the central government to all oil companies to prioritise domestic gas. Hence, in due course there will be a reduction in commercial gas supply,” he said.

He said the impact would be particularly visible in Mumbai.

Bhujbal said the option of switching to kerosene had been suggested to eateries, but hotel owners raised safety concerns and pointed out that such a shift would require changes to their existing systems.

State revenue minister Chandrashekhar Bawankule warned of strict action against hoarding of LPG cylinders and criticised the Congress, alleging that the Opposition was attempting to create confusion over the issue.

Shortage Reported In Kerala

Reports from Kerala also pointed to disruptions. A PTI report from Thiruvananthapuram cited industry sources who said LPG distribution to commercial establishments such as hotels had “almost come to a standstill”.

Hotels and restaurants often consume several LPG cylinders each day, depending on their size and operations.

A medium-scale hotel in Kochi partially shifted to a traditional firewood stove after facing supply issues. “We cooked rice using the traditional firewood stove today. We could not close down the hotel all of a sudden as around 25 people are working here,” its owner said.

He added that the establishment typically uses up to five cylinders daily and had exhausted its reserves.

A hotel owner in Kozhikode said the business might have to close if the shortage persists. “During the normal season, we need at least six cylinders daily. As it is the time of Ramadan fasting, we can manage with up to four cylinders. But, when we placed the order this morning, we were not getting even that number of cylinders,” he said.

Officials from the Kerala Hotel and Restaurant Association said, “Indian Oil Corporation (IOC) informed us on Monday that the refilling of commercial cylinders has been stopped. But institutions coming under the essential service category, and households, will not be impacted, as per our knowledge.”

The association has submitted a memorandum to Prime Minister Narendra Modi, petroleum minister Hardeep Singh Puri, and Kerala chief minister Pinarayi Vijayan seeking immediate intervention.

Kerala civil supplies minister GR Anil said a meeting of stakeholders had been convened. “Kerala is a consumer state and therefore we requested the Centre to extend a special consideration to the hotel industry in the state in the distribution of LPG cylinders,” he said.

Impact Spreads To Other Cities

Hotel associations in Bengaluru and Chennai have also flagged supply disruptions, warning that restaurants could halt operations if LPG supplies are not restored.

The Chennai association said banquet bookings and food supply to IT parks and college hostels could be affected.

The National Restaurants' Association of India (NRAI) urged government intervention, warning of a possible “catastrophic closure” of businesses.

Restaurants in Gurugram and Mumbai have also reported shortages. “We have backup cylinders that can last about three days. If the situation continues, we may have to shift to residential cylinders or reduce menu items,” Rohit Arora, a restaurant manager in Gurugram, told HT.

According to NDTV, eateries in Mumbai’s Dadar, Andheri and Matunga areas have removed slow-cooking dishes from menus and shortened operating hours to conserve LPG.

Meanwhile, the Pune Municipal Corporation has temporarily shut the city’s gas crematoriums, directing that available propane and butane be prioritised for domestic LPG supply.

Commercial LPG cylinder prices were increased by Rs 115 last week, while domestic cylinder prices rose by Rs 60.

India’s LPG Demand And Imports

India consumes around 31.3 million tonnes of LPG annually. About 87% of this is used in households, while the rest is consumed by commercial establishments such as hotels and restaurants.

Approximately 62% of the country’s LPG demand is met through imports.

The US-Israeli strikes on Iran and Tehran’s retaliation have shut the Strait of Hormuz, a key maritime route through which India receives 85–90% of its LPG imports from West Asian countries including Saudi Arabia and Qatar.

Global Response To Strait Of Hormuz Situation

US Chairman of the Joint Chiefs of Staff General Dan Caine was asked on Tuesday whether American forces might escort vessels through the Strait of Hormuz.

Caine said he is “looking at a range of options to set the military conditions to be able to do that”.

US defence secretary Pete Hegseth referred to President Donald Trump’s social media post warning Iran against disrupting oil shipments through the route. “He takes very seriously the condition of that strait,” Hegseth said.