India has temporarily allowed the use of kerosene, coal and biomass fuels as the West Asia crisis disrupted LPG and crude supply routes through the Strait of Hormuz. The government said household fuel supplies remain stable despite panic buying
Published Date – 12 March 2026, 09:26 PM
New Delhi: India has temporarily reintroduced kerosene for household use and coal for hotels and restaurants, as the escalating West Asia crisis disrupted its energy supply lines from Gulf countries.
The government has allocated 48,000 kilolitres of additional kerosene to states on top of the regular quota of 1 lakh kl for use as cooking fuel.
Besides, it asked environmental bodies to permit the use of biomass, RDF pellets and coal as alternate fuel in the hospitality and restaurant segment for one month, a senior oil ministry official said.
With the conflict shutting the Strait of Hormuz, the narrow sea lane between Iran and Oman through which India gets more than half of its 5.8 million barrels of crude oil, 55 per cent of cooking gas LPG and 30 per cent liquefied natural gas (LNG), oil companies prioritised supply of LPG to household kitchens while cutting back on commercial users like hotels and restaurants.
With certain measures helping raise domestic LPG production by 28 per cent and some alternative sources being tapped overseas, the government has decided to allow some sale of commercial LPG to meet a fifth of the demand, Sujata Sharma, Joint Secretary in the Oil Ministry, said.
“The state governments will have to identify the beneficiaries,” she said.
As panic buying escalates, the government has extended the LPG refill ordering window for rural users to 45 days, up from 25 days set last week for all users, which itself had replaced the previous 21-day limit. The move aims to manage demand and ensure equitable distribution amid the ongoing energy supply disruptions caused by the West Asia crisis, she said.
The increase in the monthly quota of kerosene released to states is the first in more than a decade and temporarily reverses the government’s stated objective of phasing out the fuel, which, besides being heavily subsidised, was also used for adulteration in petrol.
Delhi was officially declared the first kerosene-free city in India on June 17, 2014. The initiative, launched in 2012, replaced kerosene usage with LPG connections for households, aiming to reduce pollution and fire risks.
Mass roll-out of LPG through the grant of free connections to the poor under the Pradhan Mantri Ujjwala Yojana was intended to cut the usage of firewood and coal for cooking, especially in rural households.
However, with LPG access being prioritised for essential domestic cooking and establishments like hospitals and educational institutions, commercial LPG supply remains restricted, forcing a temporary return to older, less clean energy sources.
Sharma said that despite constraints, not a single petrol pump out of the over 1 lakh fuel stations in the country has run dry and petrol and diesel sales continue to be normal. Also, not a single LPG dealer has run dry, and they have enough stocks.
“Yes, there has been a spurt in bookings… we have seen a manifold increase in bookings due to panic,” she said. “There is no case for panic booking. We are doing the best to ensure cylinders reach all the households.” Oil Minister Hardeep Singh Puri, in a statement in the Lok Sabha, said that for 13 days in a row, the Strait of Hormuz, through which 20 per cent of the world’s crude oil, natural gas and LPG flows, has been disrupted.
“For the first time in recorded history, the Strait of Hormuz has been effectively closed to commercial shipping. Despite India having no role in causing the conflict, like many countries, India has to navigate through its consequences.” He said India’s crude supply position is secure, and volumes secured exceed what Hormuz would have delivered.
“India sources crude from 40 countries, against 27 in 2006-07. This structural diversification, built through sustained policy over successive years, has given us options that other nations now find themselves without. Refineries are operating at high capacity utilisation; in several cases, they are exceeding 100 per cent,” he said.
Puri said there is no shortage of petrol, diesel, kerosene, ATF or fuel oil. “The availability of petrol, diesel, aviation turbine fuel, kerosene and fuel oil is fully assured. Retail outlets across the country are stocked, and supply chains for these products are functioning normally.” Additional allocation of PDS kerosene has been made to all states, he pointed out.
On LPG, he said India was previously importing 60 per cent of its LPG requirements from Gulf countries such as Qatar, UAE, Saudi Arabia and Kuwait and 40 per cent was produced domestically. Procurement has now been actively diversified, with cargoes being secured from the US, Norway, Canada, Algeria and Russia, in addition to available Gulf sources.
“The standard time from booking to delivery for domestic LPG cylinders remains 2.5 days, unchanged from pre-crisis norms,” he said. “Field reports indicate hoarding and panic booking at the distributor and retail level, driven by consumer anxiety rather than any actual supply shortage.” “The House should be clear on this: the rush-booking pressure in some localities reflects a demand distortion, not a production or supply failure,” he said, adding that Delivery Authentication Code coverage is being expanded from 50 per cent to 90 per cent of consumers.
Under this system, a cylinder can only be logged as delivered when the consumer confirms receipt through a one-time code on their registered mobile, making undocumented diversion effectively impossible to conceal.
“Commercial LPG has been regulated to prevent black marketing, not to penalise the hospitality sector,” he said, adding that commercial LPG is sold in a completely deregulated, over-the-counter market without any government subsidy.
There is no registration system, no booking requirement, no digital authentication and no delivery confirmation mechanism. Any business or individual can purchase cylinders in any quantity at the point of sale, with no government control in normal times.
“In a supply-constrained environment where public anxiety is elevated, this deregulated structure creates a direct and uncontrolled pathway for hoarding, diversion and resale at inflated prices. Had commercial supply been left entirely unrestricted, cylinders purchased over the counter could have been diverted to the grey market at the expense of genuine commercial consumers and domestic households alike.
“The government has therefore taken the responsible course: to regulate this channel with clear priorities and a transparent allocation mechanism,” he added.
A three-member committee has been formed to assess genuine need by geography and sector to ensure available commercial volume reaches genuine users first. “In a major decision, 20 per cent of the average monthly commercial LPG requirement will be allocated from today by OMCs, in coordination with the state governments, so that there is no hoarding or black marketing,” he said.
Puri said alternate fuel options are being activated to ease pressure on LPG and gas channels. Kerosene is being made available through retail outlets and PDS channels, and fuel oil is being made available for industrial and commercial consumers.
The Ministry of Environment, Forest and Climate Change has advised State Pollution Control Boards to permit, for the duration of this crisis period, the use of biomass, RDF pellets and kerosene or coal as alternate fuels for the hospitality and restaurant segment for one month, which would enable a wider range of establishments to switch and free up LPG for priority consumers.
“This is not the moment for rumour-mongering or fake narratives. India is navigating the most severe global energy disruption in recorded history. Crude supply is flowing. Gas is prioritised for homes and farms. LPG production has been stepped up by 28 per cent. Consumer prices are held far below what markets and regional comparators would dictate,” he said.
Schools are open. Petrol is on the forecourt. Every citizen, regardless of political affiliation, has a stake in that. “India must stand united behind its energy warriors, behind the institutions managing this crisis, and behind the national interest. The record of preparation and the record of response speak for themselves,” he added.
India, the world’s third-largest crude importer, sources 88 per cent of its oil needs from abroad. It consumes 5.8 million barrels per day, of which 2.5 to 2.7 million barrels come from West Asian countries like Saudi Arabia, Iraq and the UAE via the Strait of Hormuz. The choke point also carries 55 per cent of India’s cooking gas (LPG) and 30 per cent of liquefied natural gas (LNG), used for power, fertilisers, CNG and household cooking.
The ongoing conflict has largely halted shipments through the strait, forcing India to seek alternate crude sources from Russia, while LPG and LNG supplies remain constrained. Shortages are affecting businesses nationwide, from restaurants and crematoriums to ceramic units and even the Delhi High Court canteen.
The government has prioritised household cooking and transport fuels, directing refineries to maximise LPG output by cutting petrochemical feedstock streams and barring units, including Reliance Industries Ltd’s export-oriented plants, from using LPG as feedstock. Industrial LNG and LPG deliveries have been curtailed to protect more than 33 crore households, which account for roughly 86 per cent of LPG consumption.
To manage demand, cooking gas prices were raised for the first time in 11 months, and the minimum interval between subsidised refills was extended from 21 to 25 days for urban areas and 45 days for rural areas.