LPG Shortage Highlights: Reliance says will ramp up LPG production amid West Asia supply disruptions

The auto component sector has requested a continuous supply of LPG and PNG for MSME foundry and forging units, or a reasonable timeframe to transition to alternative fuels, following the government’s decision to revise the priority for domestic natural gas allocation due to the West Asia crisis, according to PTI.

In a letter to the Ministry of Heavy Industries, Vikrampati Singhania, President of the Automotive Component Manufacturers Association of India, noted that the industry is deeply integrated with global automotive value chains. He emphasised that timely government support during this period of geopolitical disruption is crucial to maintain export continuity and safeguard India’s competitiveness in international markets.

Andhra Pradesh Civil Supplies Minister Nadendla Manohar clarified that there is no shortage of LPG in Andhra Pradesh and urged the public not to panic. He confirmed that sufficient stocks are available to meet both domestic and commercial requirements, according to ANI.

The minister instructed officials to implement strict district-wise measures to prevent LPG cylinders from being diverted to the black market. He also directed the Joint Collectors in all districts to closely monitor the situation.

Shares of food delivery companies and restaurant operators closed lower on Tuesday amid concerns over a shortage of commercial LPG cylinders, raising fears that operations could be disrupted if the issue is not resolved.

The stock of Swiggy fell 2.26%, while Eternal declined 1.50% on the BSE.

Jubilant FoodWorks, which runs fast-food brands Domino's Pizza and Dunkin' Donuts in India, dropped 1.45%. Meanwhile, United Foodbrands slipped 1.42%, Sapphire Foods India edged down 0.94%, and Restaurant Brands Asia fell 0.73%.

Prime Minister Narendra Modi on Tuesday held a meeting with senior ministers and directed them to work together to ensure that Indian consumers are not adversely affected by the impact of the West Asia conflict on petroleum supply and prices, reported PTI citing sources.

With tensions escalating in West Asia following attacks by the United States and Israel on Iran, global oil prices have risen sharply, raising concerns about a potential shortage of petroleum products, including LPG, in India.

Sources said the prime minister has been closely monitoring the situation to ensure that consumers are shielded from rising fuel costs, given that India relies heavily on imported crude oil and natural gas. He also asked ministers to coordinate closely to prevent any disruption in the supply of petroleum products and LPG.

According to PTI, Reliance said it is taking "proactive steps and in line with the government guidelines, to maximize LPG production from our refining and petrochemicals complexes at Jamnagar - the world's largest integrated refining hub. Our teams are working around the clock to optimize refinery operations and enhance LPG output so that supplies to the domestic market remain stable and reliable."

"For Reliance, India's energy security and the well-being of millions of Indian families always come first. We will continue to work closely with the Government of India and remain fully compliant with all national guidelines and allocation priorities, ensuring that energy supplies reach the sectors and communities that need them the most," the statement said.

Irfan Ansari, Health Minister of Jharkhand, on Tuesday called on the Centre to ensure uninterrupted supply of commercial LPG cylinders for industries and hotels in the state.

Ansari said he has written to Hardeep Singh Puri, Union Minister for Petroleum and Natural Gas, seeking immediate intervention in the matter, as per PTI.

"Commercial LPG cylinders are used on a large scale in the state's hotels and restaurants. Many hotels also supply food to hospitals. Any disruption in cylinder supply could adversely affect hotel businesses, the livelihoods of people associated with them, and the convenience of the general public," he said.

Amid continued disruptions in the supply of commercial LPG cylinders linked to the West Asia conflict, GR Durairaj, State Vice-President of the Tamil Nadu Merchants' Association, has appealed to the government for support to help revive the struggling hotel sector.

Speaking to ANI, Durairaj said that the association’s president Vikramaraja met MK Stalin, Chief Minister of Tamil Nadu, and sought assistance in ensuring the supply of commercial cylinders to hotels, many of which have been forced to shut down due to the shortage.

"Today, our leader Vikramaraja met the CM and requested support in continuing the hotel business as many of the hotels have been shut down due to the supply of commercial cylinders to the hotels...We request the Central and State Govts to support mosques, temples and churches with cylinders to be given there because all underprivileged take mid-day meals at temples, churches and mosques," Durairaj said.

GR Durairaj, State Vice-President of the Tamil Nadu Merchants' Association, appealed to the Central and State governments to prioritise LPG supply to religious institutions such as mosques, temples and churches that provide mid-day meals to underprivileged people.

He highlighted that many city hotels cannot switch to firewood cooking due to strict safety and fire inspection norms.

The association proposed that local bodies grant special permissions for alternate firewood cooking in designated areas for city-based hotels.

Durairaj noted that hotels in villages and small towns may not face major issues, but city-based establishments require special arrangements to continue operations during the LPG shortage.

Andhra Pradesh Star Hotels Association president RV Swamy in a letter to Civil Supplies Minister N Manohar, said hospitality establishments have begun receiving signals from cooking gas distributors about possible constraints in LPG supplies.

“Hospitality establishments are receiving indications from distributors regarding possible constraints in the supply of LPG cylinders, leading to growing concern within the industry,” he said.

“Any prolonged disruption in commercial LPG cylinder supply could significantly impact hotels, restaurants, catering services, banquets and conferences,” Swamy added.

Reliance Industries has said that it is working around the clock to optimize refinery operations and enhance LPG output amid shortage induced by tensions in West Asia, Reuters has reported.

‘Taking proactive steps and in line with the government guidelines, to maximize lpg production,’ the company also said.

Dinesh Gundu Rao, a minister in Karnataka, on Tuesday urged the central government to take proactive steps and clearly outline how the supply of commercial LPG cylinders will be maintained amid shortages linked to the ongoing West Asia crisis, according to ANI.

He also criticised the Centre’s stance on the Iran conflict, alleging that India had openly aligned with Israel and the United States during the crisis.

Rao said, "The government should clearly tell how they will restart the required supply and how people and businesses will survive till then... This war in Iran is having great consequences for us also. We need a lot of clarity and preemptive measures to ensure that the supply of LPG and natural gas is not hampered."

"The central government, the Modi government, have been pro-Israel and America in this war against Iran. They have taken their side literally. For the first time, India has become a country which is sitting on one camp... We should reach out to them and ensure that they help us in this hour of crisis because we are in this crisis because of them... India's weightage in the world's political scenario is also questionable," he added.

The Gujarat government has reduced gas allocation for industrial use by 50% amid concerns arising from the West Asia conflict, while assuring that the supply of domestic LPG cylinders remains unaffected, a state minister said on Tuesday, according to PTI.

Energy Minister Rushikesh Patel said the state government and the Centre are working closely to ensure that households do not face any shortage of cooking gas cylinders. He made the remarks in Gandhinagar ahead of the assembly session.

Patel added that the measures are being implemented in accordance with periodic guidelines issued by the central government to prevent panic and maintain a steady supply of LPG for domestic consumers.

Milind Deora, MP from Shiv Sena, said on Tuesday that the central government is taking measures to ensure adequate availability of LPG cylinders and urged people not to engage in hoarding.

The Government of India has also invoked the Essential Commodities Act, 1955 to regulate the availability, supply and fair distribution of petroleum products and natural gas.

The move comes in response to recent geopolitical developments that have disrupted the global fuel supply chain.

“The Govt of India, in partnership with the state governments, is doing whatever it can to ensure that there is minimal disruption of supplies of LPG to public eateries and homes. The govt is ensuring there are adequate supplies. I urge people not to indulge in hoarding,” he told ANI.

Some hotels in Puducherry have begun introducing low-fuel menus after a shortage of commercial LPG cylinders disrupted their regular service schedules.

A hotel owner told PTI on Tuesday that establishments have implemented strict measures to cope with the limited availability of commercial cylinders, which has been linked to the ongoing conflict between the United States and Iran.

Siddaramaiah, Chief Minister of Karnataka, has written to Hardeep Singh Puri, Union Minister for Petroleum and Natural Gas, seeking urgent intervention to address the severe shortage of commercial LPG in Bengaluru, according to ANI.

He said the disruption in supply following a central directive is pushing restaurants, hotels and catering services towards temporary closure. Siddaramaiah also noted that a revised order issued by the Ministry of Petroleum and Natural Gas, which prioritises domestic LPG supply, has unintentionally triggered a supply crisis for commercial users.

The Aam Aadmi Party on Monday criticised the BJP-led central government, alleging that the LPG supply crisis in the country is worsening. Party chief Arvind Kejriwal warned that the situation could deteriorate further in the coming days.

Taking aim at Narendra Modi over the issue amid the ongoing conflict in West Asia, Kejriwal accused the government of remaining silent and being submissive before Donald Trump.

He also claimed in a post on X that LPG supply to most commercial establishments across the country has been halted, except for educational institutions and hospitals, and that gas will now be provided only for domestic use.

Restaurants and caterers in Delhi are experimenting with creative menu adjustments and switching to electrical appliances to keep operations running as a potential LPG shortage linked to the West Asia conflict puts pressure on the sector, according to ANI.

Industry representatives said the restaurant industry is already facing reduced supplies and uncertainty over the continued availability of commercial LPG cylinders.

Manpreet Singh, Honorary Treasurer of the National Restaurant Association of India, said gas supply to restaurants has begun to shrink as the availability of commercial LPG cylinders declines.

DK Shivakumar, Deputy Chief Minister of Karnataka, on Tuesday criticised the central government for not responding adequately to the shortage of commercial LPG cylinders, warning that the situation could seriously impact hotels, hospitals and other establishments, as per ANI.

He added that the shortage may force restaurants and hotels across the country to suspend operations due to a lack of cooking gas and could also trigger a sharp increase in prices.

"Today, the entire country is boiling. All hotels want to close because they don't have gas. All prices will shoot up. Everyone has to look at alternatives like firewood, electric stoves, or kerosene stoves. The central government is not reacting to it. Foreign policy is going from bad to worse. The central government should debate this, come out with a stand, and involve all parliament members to give their opinions," he stated.

Telecom tower manufacturers on Tuesday voiced concern that the suspension of LPG supplies could disrupt mobile and internet services across the country, reported PTI.

The Digital Infrastructure Providers Association said oil companies have stopped supplying LPG to telecom tower operators following a government directive to prioritise domestic consumers.

The telecom infrastructure sector warned that the fuel shortage, triggered by current geopolitical developments, could affect the uninterrupted functioning of mobile and internet networks nationwide. It has urged the government to intervene and ensure priority power supply for the sector.

Industry representatives said the situation in Kolkata reflects similar concerns raised by restaurants in cities like Bengaluru and Chennai, where eateries have cautioned that they may have to stop operations as LPG supplies run dry.

According to the National Restaurant Association of India, the sector relies heavily on commercial LPG, and any prolonged disruption in fuel supply could lead to widespread shutdowns.

Piyush Kankaria, head of the association’s Kolkata chapter, told PTI that the city has around 5,000 restaurants. A quick survey among members showed that many establishments are already running low on cooking fuel.

"About 40 per cent of restaurants have indicated there will be immediate disruption, while another 30-40 per cent said they can run operations only for a few more days as they have limited stock," Kankaria said. He added, “On Tuesday, there is no commercial LPG supply. Our central office is trying to seek government intervention to resolve the issue.”

Pradeep Shetty, Vice President of the Federation of Hotel and Restaurant Associations of India and its Western India spokesperson, said on Tuesday that the shortage of commercial LPG cylinders has intensified into a major supply disruption in several cities across India. He added that many hotels and restaurants are reporting operations coming close to a standstill.

"The shortage of commercial LPG has become extremely serious over the past week, with intermittent disruptions escalating into a near-complete halt in supply in several regions since yesterday. Following the 5th March notification by the Ministry of Petroleum and Natural Gas, there has been considerable confusion among suppliers and distributors, many of whom have stopped supplying commercial LPG cylinders to hotels, restaurants and food service establishments," Shetty stated, according to ANI.

"We are already receiving reports of severe shortages from cities including Mumbai, Pune, Aurangabad and Nagpur, while similar disruptions are being reported in States such as Delhi, Karnataka, Telangana and Andhra Pradesh. If the situation does not improve within the next two days, nearly 50 per cent of hotels and restaurants in Mumbai may be forced to temporarily shut operations depending on the stock of cylinders they currently have," he added.

The Rajasthan Legislative Assembly witnessed a heated protest on Tuesday over the increase in LPG cylinder prices, as legislators from the Indian National Congress demanded that the state government provide subsidies to consumers. The opposition members later staged a walkout in protest, as per PTI.

During Zero Hour, Congress MLA Amit Chachan said the price rise had added to the burden on common people amid rising inflation. He pointed out that domestic LPG cylinders had become ₹60 costlier and urged the government to offer subsidies to ease the impact on consumers.

Leader of Opposition Tikaram Jully also called on the government to respond, stating that higher prices of commercial LPG cylinders were forcing hotels and restaurants to shut down and creating difficulties for poorer households.

Amid reports of LPG shortages in some parts of the country, Odisha Chief Secretary Anu Garg on Tuesday urged people not to worry, stating that sufficient LPG stocks are available in the state.

She reviewed the availability of LPG, petrol and diesel during a meeting with senior officials from oil marketing companies. According to an official statement, the discussion focused on the distribution system and supply chain arrangements for transporting LPG from refineries and depots to retail outlets, according to PTI.

Representatives of the oil marketing companies informed the meeting that there are no issues in supplying cooking gas, petrol and diesel to consumers, the statement added.

Edappadi K. Palaniswami, general secretary of All India Anna Dravida Munnetra Kazhagam, on Tuesday called on the Centre to take necessary steps to stop the LPG cylinder shortage from worsening and ensure timely supply of gas cylinders.

He also said that instead of causing unnecessary panic among the public, the ruling Dravida Munnetra Kazhagam government should ensure that hotels and restaurants across Tamil Nadu continue to operate without disruption.

"The restaurants have already been affected due to the unavailability of LPG cylinders in some districts of Tamil Nadu. I urge the Central Government to take appropriate measures to prevent this problem from escalating further and ensure the timely availability of gas cylinders," Palaniswami stated in a post on the social media platform X.

"To ensure that the poor sections are not affected, the Amma canteens should continue to operate at full capacity and ensure that food is served without any hindrance," the former Chief Minister said.

A senior official from the Civil Supplies Department said on Tuesday that the supply of LPG cooking gas for both domestic and commercial users in Telangana continues to remain normal, according to PTI.

The official also cautioned that strict action will be taken against anyone found hoarding or black-marketing LPG cylinders.

However, hoteliers in Telangana said they are preparing for potential disruptions to their operations and warned that over 60% of eateries in the state may have to shut down within a day or two if the supply of commercial LPG cylinders is delayed due to the ongoing conflict in West Asia.

Expressing concern over the shortage of commercial LPG cylinders, the Hotel & Restaurant Association of Eastern India (HRAEI) said the situation was causing operational challenges for hotels and restaurants.

The association also warned that the LPG shortage could impact the livelihoods of many people who depend on the hospitality industry.

"It is disturbing for people working in and running small eateries in eastern states, including Bihar. Many people are entirely dependent on small eateries for their livelihood there. They are facing a lot of difficulty," Shreya De, Assistant Manager (Marketing & PR) of HRAEI said, according to PTI.

"The situation in West Asia is alarming. I do not know how long this will go on, but what is certain is that normal people and businesses are having a tough time," she stated, requesting the government to take action.

The Andhra Pradesh Star Hotels Association on Tuesday urged the state government to ensure adequate and uninterrupted supply of commercial gas cylinders, as oil marketing companies have begun rationing supplies due to supply chain disruptions caused by the ongoing conflict in West Asia.

A source from Indian Oil Corporation Limited told PTI that commercial Liquefied Petroleum Gas (LPG) distribution is currently being limited to give priority to domestic consumers. The Centre has also revised its gas allocation framework to address changing energy demand.

“Facilitate coordination with LPG distributors and concerned authorities in the state to ensure reasonable and uninterrupted availability of commercial LPG cylinders for the hospitality sector in Andhra Pradesh,” Association president RV Swamy in a letter to Civil Supplies Minister N Manohar stated.

Fertiliser company shares were in focus on Tuesday after the government decided to prioritise gas supply to the sector.

Shares of Rashtriya Chemicals and Fertilisers jumped 16.18%, while National Fertilizers rose 13.38%. Deepak Fertilisers & Petrochemicals Corporation gained 4.86%, Paradeep Phosphates climbed 4.84%, Chambal Fertilisers and Chemicals advanced 4.62%, and Coromandel International increased 3.87% on the BSE.

The Ministry of Petroleum said that all domestic LPG consumers are required to complete biometric Aadhaar authentication (e-KYC). The ministry added that the process is free, simple and convenient, and can be completed within a few minutes from home using a smartphone.

“To initiate biometric Aadhaar authentication (e-KYC) and for detailed information, visit: https://pmuy.gov.in/e-kyc.html,” it concluded.

Amit Gupta, joint secretary of the New Delhi Traders' Association, said restaurants may have to increasingly rely on electrical appliances if the shortage continues.

"If the situation continues like this, then we will have to buy electrical appliances to cope and serve food. But the cost of meals might increase as electricity costs in Connaught Place are already high," he said.

Gupta added that restaurants may also have to remove certain dishes from their menus as not all cuisines can be prepared using electrical appliances.

The Marathwada Association of Small-Scale Industries and Agriculture (MASSIA) has flagged concerns over small-scale industries and hotels in the region being impacted by the gas shortage.

MASSAI president Arjun Gaikwad told PTI that four small-scale units in the industrial area of Chhatrapati Sambhajinagar have been shut, while several others are on the brink of closure. "We held a meeting of stakeholders facing shortages. Four units in Chhatrapati Sambhajinagar were shut today. At least 17 units will have to close in the next three to four days," he said.

Chamber of Marathwada Industries & Agriculture (CMIA) president Utsav Machar stated that industrial units in the district need 150 to 240 metric tonnes of gas daily, the report added.

Dhruveer Singh Gandhi, Secretary of NRAI Mumbai and owner of Great Punjab restaurant, feels that policy decisions must be more sympathetic to the industry.

“Our restaurant will run out of LPG tonight. From tomorrow morning, I will not just struggle to serve customers — I will struggle to feed the 40–50 staff members who live and work with us. Restaurants cannot function without commercial LPG. A disruption in supply essentially means shutting down kitchens across the country,” Gandhi said.

He urged the government for “fair treatment and continuity of commercial LPG supply so that our kitchens — and livelihoods — do not shut down overnight”.

The government has taken numerous measures to increase supply of domestic cooking gas amid the West Asia conflict and oil marketing companies will also discuss with many restaurant associations to understand their problems of LPG supply, reported ANI citing sources on Tuesday,

A three-member committee comprising Executive Directors of IOC, HPCL and BPCL has been constituted by the government to listen to their grievances, they said.

• Under revised allocation: LPG, CNG and piped gas manufacturers will be supplied domestic natural gas for100% of their average past six-month gas consumption ahead of other sectors.
• The fertiliser sector at second place, with at least 70% of its past six months demand being met.
• Third is the tea industries, manufacturing and other industrial consumers, who will be maintained at 80% of their past six-month average gas consumption subject to operational availability.
• All city gas distribution (CGD) entities supplying gas to industrial and commercial consumers have been placed at fourth spot on the priority list. They must ensure their customers receive 80% of their past six-month average gas consumption subject to operational availability.

Domestically produced natural gas will now be supplied on a priority basis, according to a government notification.

What does this mean? Priority sector status for domestic natural gas supply has been expanded to include liquified petroleum gas (LPG), along with compressed natural gas (CNG) and piped cooking gas.

The Centre has appointed state-owned gas utility GAIL to manage the supplies of natural gas to implement priority order.

The Hotel & Restaurant Association of Odisha (HRAO) on Tuesday sought Union Petroleum Minister Hardeep Singh Puri's intervention for smooth provisions of LPG to hotels and restaurants.

In its memorandum submitted to Puri, HRAO said the LPG supply disruptions are creating serious operational challenges for the hospitality industry.

PTI reported panic among the common people in Delhi, who are lining up at gas service centres to secure cooking gas cylinders amid the reported shortage of LPG supply due to the West Asia war.

• Oil refining companies have been ordered to absorb the impact of LNG supply disruption to the extent feasible.
• This is to be done by reducing gas allocation to refineries to around 65% of past six-month consumption, subject to operational feasibility.
• Further, every producer, importer, transporter, marketer or distributor of natural gas including LNG and regasified LNG has been asked to furnish information relating to production, imports, stocks, allocation, supply and consumption to the Central Government or to any officer authorised by it.

Hindustan Petroleum Corporation (HPCL) in a post on X gave an update amid LPG shortage due to the West Asia war.

• Steps have been taken to enhance LPG production and prioritise its availability for domestic consumers, and essential non-domestic sectors such as hospitals and educational institutions.
• Requests from other non-domestic sectors will be reviewed by a committee of OMC Executive Directors, and prioritised based on merit, necessity, and product availability.
• For essential requirements from other sectors, submissions may be made to the committee by emailing at: edlpg@bharatpetroleum.in, ndanecareho@indianoil.in, and lpg.sbu.head@hpcl.in

• As per the order, 70% of fertilizer plants' past six-month average gas consumption must be made available, subject to operational availability.
• Gas marketing companies to ensure gas supply to tea industries, manufacturing and other industrial consumers supplied through the national gas grid is maintained at 80% of their past six-month average, subject to operational availability.
• All City Gas Distribution entities to ensure commercial and industrial consumers supplied through their networks receive 80% of past six-month average, subject to operational availability.

According to the order, the supply of natural gas to the certain sectors shall be treated as priority allocation and shall be maintained subject to operational availability to 100% of their average past six-month average gas consumption.

These sectors include:

• Domestic Piped Natural Gas supply;
• Compressed Natural Gas for transport;
• LPG production including LPG shrinkage requirements;
• Pipeline compressor fuel and other essential pipeline operational requirements.

The Centre today invoked the Essential Commodities Act (EC Act ) to ensure uninterrupted supply of domestic cooking gas, directing refineries and petrochemical units to maximise production of liquefied petroleum gas (LPG) and divert key hydrocarbon streams to the LPG pool.

The official added that electric crematoriums and wood-fired facilities equipped with air pollution control systems will continue to function.

At the city's Vaikunth crematorium — its three gas-fired furnaces will remain shut, and five electric furnaces will remain operational.

The Pune Municipal Corporation (PMC) has temporarily shut the city's gas crematoriums due to restrictions on use of Liquefied Petroleum Gas (LPG) components such as propane and butane amid the ongoing West Asia conflict, PTI reported.

In an order dated 5 March, the civic body has directed that all available butane and propane be prioritised for domestic use and has shut gas crematoriums till further notice, the agency quoted an official saying.

The Chennai Hotels Association, meanwhile, wrote to Prime Minister Narendra Modi, calling for his attention to the matter and requesting urgent supply of LPG cylinders.

“We request you to please represent our case on an urgent basis, as the food industry works on a 24 x 7 basis for many hospitals who require the food to be supplied on time besides IT Parks, students at college hostels, train and business travellers will all be affected, if the supply of commercial LPG is hindered,” the association said.

OMCs raised the price of 14.2 kg non-subsidised LPG cylinder by ₹60 across major cities in India, with effect from 7 March.

Data on the Indian Oil Corporation (IOC) website showed that the cylinder now costs ₹913 each in the national capital city of Delhi.

Further, price of the non-subsidised household LPG cylinder in Mumbai, Kolkata and Chennai now stand at ₹912.50, ₹939 and ₹928.50 respectively, the IOC website showed.

The Bangalore Hotels Association on Monday said the hotel and restaurant operations across the city are likely to be affected starting March 10.

“Since the gas supply has stopped, the hotels will be closed from tomorrow. Since the hotel industry is an essential service, common people, students, and medical professionals, who rely on the hotels for daily meals, will be affected,” the association said in a statement.