India has invoked emergency powers and instructed oil refiners to significantly increase the production of liquefied petroleum gas (LPG) in order to prevent a possible shortage of cooking fuel following supply disruptions triggered by the ongoing Middle East crisis. According to an official government directive issued late on Thursday, refiners have been asked to maximise the use of available propane and butane to boost LPG output. India is the world’s second-largest importer of LPG and consumed approximately 33.15 million metric tonnes of the fuel last year. LPG, widely used for cooking in households, is primarily a blend of propane and butane, making these inputs critical for maintaining domestic supply.
Government data indicates that nearly two-thirds of India’s LPG demand is met through imports, with around 85 to 90 percent of those supplies sourced from countries in the Middle East. In response to the disruption risk, authorities have directed producers to ensure that LPG, along with propane and butane, is made available to state-run refiners including Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation so that household distribution remains unaffected. India currently has about 332 million active LPG consumers, highlighting the scale of demand and the importance of uninterrupted supply across the country.
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The emergency directive is also expected to affect other segments of the energy and petrochemical industry. A mandatory diversion of propane and butane toward LPG production could reduce the output of alkylates, an important gasoline blending component manufactured by companies such as Reliance Industries. According to industry data, Reliance exported around four cargoes of alkylates every month last year. Additionally, the government has instructed refiners not to divert propane and butane for petrochemical manufacturing. Market sources say this move could reduce profit margins for petrochemical firms producing materials like polypropylene and alkylates, which generally command higher prices than LPG in global markets.