LPG Crisis 2026: India Reinstates Kerosene and Coal

Introduction: A Nation Grapples with an Energy Crunch

India is currently facing a significant liquefied petroleum gas (LPG) supply shortage, a direct consequence of the escalating military conflict in West Asia. The disruption has severely impacted global energy supply chains, particularly through the Strait of Hormuz, a critical maritime passage for India's energy imports. Across the country, cities like Delhi, Mumbai, and Bengaluru are witnessing long queues at gas agencies and a surge in panic bookings as households and businesses grow anxious about securing cooking fuel.

In response, the Indian government has initiated a series of emergency measures aimed at stabilizing the domestic supply, managing demand, and preventing widespread panic. These actions include boosting domestic production, diversifying import sources, and temporarily authorizing the use of alternative fuels for commercial establishments.

The Government's Multi-Pronged Strategy

Faced with a potential crisis, the central government, in coordination with various ministries, has rolled out a comprehensive plan. The strategy focuses on both augmenting supply and curtailing non-essential demand to prioritize household consumers. Petroleum Minister Hardeep Singh Puri has assured Parliament that while the situation is challenging, the supply of petrol, diesel, and aviation turbine fuel remains stable and there is no need for alarm.

Authorizing Alternative Fuels for Commercial Use

A key decision has been to temporarily allow commercial establishments, such as hotels and restaurants, to use alternative fuels. The Ministry of Environment, Forest and Climate Change (MoEFCC) has advised State Pollution Control Boards to permit the use of kerosene, coal, and biomass for one month. This move, while a step back from cleaner energy goals, is designed to divert a significant volume of LPG from the commercial sector to domestic kitchens, which account for approximately 87% of the nation's total LPG consumption.

Bolstering Emergency Fuel Supplies

To support this shift, the government has increased the allocation of alternative fuels. An additional 48,000 kiloliters of kerosene have been released to states, supplementing the regular quarterly allocation of nearly 100,000 kiloliters. State governments have been tasked with identifying beneficiaries and ensuring this extra supply reaches those in need. Simultaneously, the coal ministry has instructed Coal India Limited and Singareni Collieries Company to increase coal allotments to states, further supporting small and medium enterprises that might otherwise depend on LPG.

Ramping Up Domestic LPG Production

To compensate for the import shortfall, the Ministry of Petroleum and Natural Gas has invoked the Essential Commodities Act to compel domestic refineries to maximize their LPG output. According to Sujata Sharma, Joint Secretary at the ministry, these directives have already yielded results. Domestic LPG production has increased from representing 25% to 28% of total refinery output in just a few days. This entire additional volume is being channeled directly to oil marketing companies for distribution to household consumers.

The Geopolitical Context: The Strait of Hormuz

The current crisis underscores India's vulnerability to geopolitical instability in the Gulf region. The country imports approximately 60% of its total LPG requirement. Crucially, about 90% of these imports transit through the Strait of Hormuz. This narrow waterway, which facilitates nearly 20% of the world's crude oil flow and 50% of India's total energy supplies, has become a choke-point due to the ongoing conflict, forcing India to seek alternative and often longer supply routes.

Key Data on India's Energy Situation

Impact on Consumers and Businesses

The supply disruption has led to tangible effects on the ground. To curb hoarding, the government has increased the mandatory gap between booking two subsidized LPG cylinders in rural areas from 25 to 45 days. For commercial users, oil marketing companies have decided to allocate only 20% of their average monthly consumption, forcing many eateries to switch to traditional fuels like wood and coal. While officials maintain that the standard delivery time for domestic cylinders remains unchanged at 2.5 days, consumer anxiety has fueled a manifold increase in bookings.

Diversifying Imports and Official Assurances

To secure long-term supply, India is actively diversifying its energy procurement. Cargoes are being sourced from the United States, Norway, Canada, Algeria, and Russia to bypass the disrupted Gulf routes. Officials have repeatedly assured the public that there are no shortages at the nearly 100,000 retail outlets across the country. A 24x7 control room has been established by the Ministry of Home Affairs to monitor the situation, quell rumors, and coordinate with state governments.

Conclusion: Navigating a Difficult Period

The Indian government's response to the LPG crisis reflects a pragmatic approach to a severe logistical challenge. By temporarily reintroducing older, more polluting fuels for commercial use, it aims to protect household energy security. The combination of boosting domestic production, managing demand, and diversifying imports forms a critical strategy to navigate the disruption. The coming weeks will be crucial in determining the effectiveness of these measures as India works to stabilize its energy supply chain amidst persistent geopolitical uncertainty.