Centre Launches Panel To Crush Commercial LPG Supply Shortage
Government forms expert panel to address commercial LPG shortages hitting restaurants in major cities due to Middle East disruptions.
The Ministry of Petroleum and Natural Gas has constituted a committee to address a sudden shortage of commercial LPG cylinders that has disrupted supplies to the hospitality sector, including hotels and restaurants across major cities. The panel, comprising three Executive Directors from public sector Oil Marketing Companies (OMCs)—Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation—will review representations from restaurants, hotels, and other non-domestic industries seeking LPG allocations. This step follows widespread complaints from industry bodies warning that eateries could face shutdowns within days without restored supplies.
The shortage stems from geopolitical disruptions in West Asia, particularly the ongoing U.S.-Israeli conflict with Iran, which has hampered imports through the Strait of Hormuz—a critical route for over 80% of India's LPG shipments from the Middle East. India, which relies on imports for about two-thirds of its LPG needs, has seen vessel movements slow significantly, creating constraints on overall availability. In response, the government has prioritized domestic household supplies to prevent shortages for the country's over 330 million LPG consumers, directing refineries to maximize LPG production by diverting propane and butane streams away from petrochemical uses and toward household cylinders.
Additional measures include extending the refill booking interval for domestic consumers from 21 to 25 days to curb hoarding and black marketing, alongside orders issued earlier in March invoking emergency powers under the Essential Commodities Act. While domestic LPG remains available, commercial cylinders (typically 19 kg or larger, used by hotels and restaurants at market prices) have faced halts or severe restrictions since early March, with reports of complete stoppages in areas like Mumbai, Bengaluru, Kolkata, and parts of Punjab and Maharashtra. Industry associations such as the Federation of Hotel and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI) have written to the ministry highlighting operational threats, including potential closures and impacts on tourism and employment.
Also Read: Russia Benefits from US-Iran Conflict via Higher Oil Revenues and Waived Sanctions
The ministry has clarified that there is no outright ban on commercial supplies, emphasizing that limited imported stocks are being prioritized for essential non-domestic sectors like hospitals and educational institutions. Efforts are underway to scout alternate sources, including potential imports from the United States, Canada, and other countries, to ease the crunch. The committee's formation aims to assess sectoral demands and explore allocation mechanisms amid these constraints.
This crisis underscores India's vulnerability to global energy supply chains, especially amid heightened Middle East tensions. While the government maintains adequate overall stocks and focuses on household security, the hospitality sector's reliance on uninterrupted commercial LPG has amplified the immediate economic fallout in urban centers.
Also Read: Iran's Foreign Minister: No Talks With America, Missiles Will Keep Flying For as Long as Necessary
