India Imposes Emergency Measures, Orders Refiners to Increase LPG Production Amid Middle East Crisis

Indian Government Directs Refiners to Boost LPG Production Amid Middle East Tensions

The Indian government has issued a directive to public and private refiners to increase production of Liquified Petroleum Gas (LPG), used as a cooking fuel, in light of escalating tensions in the Middle East that pose risks to the country's energy supplies.

Under the Essential Commodities Act, 1955, the government has invoked emergency powers to direct Indian refiners to maximize their output of LPG. Public sector oil marketing companies, including Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL), and Bharat Petroleum Corporation (BPCL), have been asked to ensure that LPG procured is marketed solely to domestic consumers.

The order, dated March 5, 2026, prohibits oil refining companies from diverting or utilizing propane and butane streams for the manufacture of petrochemical products or other downstream derivatives. Any contravention of this order may attract action under the Essential Commodities Act, 1955 and the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.

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The Indian government remains well-positioned in terms of crude oil, refined product, and LPG availability, with officials stating that the country has substantial refining capacity and can shift output priorities if required.

Key Statistics:

• 18.79 million metric tonnes: LPG imports during April-January of FY26
• 17.2 million tonnes: LPG imports during the same period of the previous fiscal
• 28 million tonnes: LPG consumption during the period
• 31.3 million tonnes: LPG consumption in FY25

The escalating tensions in the Middle East have put India's crude oil supplies at risk and pressured the country's LPG flows, with 80-85% of its LPG needs sourced from Gulf suppliers and transiting via the Strait of Hormuz.

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