Govt asks refiners to maximise LPG production, OMCs to prioritise supply to domestic consumers

The Ministry of Petroleum and Natural Gas (MoPNG) has asked oil refining companies to maximize production of liquefied petroleum gas (LPG) and make it available to three public sector undertakings – IndianOil, Hindustan Petroleum and Bharat Petroleum – for sale to consumers for domestic consumption only.

Referring to the Essential Commodities Act, 1955 and the Petroleum Products (Maintenance of Production, Storage and Supply) order, 1999, an order issued on March 5, 2026 read: “All oil refining companies operating in India shall maximize and ensure the utilization of propane and butane streams produced, recovered, cracked or otherwise available with them for the production of LPG and shall make the same available to the three public sector oil marketing companies.”

The decision stated that all public sector OMCs shall ensure that LPG so produced is supplied/marketed only to domestic LPG consumers.

The order also stipulates that oil refining companies “shall not divert, use, treat, crack, transform, or otherwise use propane or butane streams for the production of petrochemical products or other such downstream derivatives.”

For context, cooking fuel consists of a combination of propane and butane.

Overall, the order seeks to re-prioritize the allocation of propane and butane streams for use in cooking gas production to protect domestic consumers amid the global fuel supply paradigm resulting from the ongoing conflict in West Asia.