New Delhi: The government seeks to increase the use of alternative fuels such as kerosene and coal amid a supply crunch caused by the West Asia conflict, which has forced hotels and restaurants across several cities to halt operations and sparked panic-buying among household consumers.
The ministry of environment, forest and climate change has advised State Pollution Control Boards to permit the use of biomass, kerosene, RDF pellets and coal as alternate fuels for the hospitality sector for a month.
The government has also increased the allocation of kerosene to states from 100,000 kiloliters every quarter. “Another 48,000 kiloliters of kerosene will be released to state governments, and here, the role of state governments in terms of identification of beneficiaries and distribution will be very crucial,” said Sujata Sharma, joint secretary, marketing, the ministry of petroleum and natural gas.
Separately, Union petroleum and natural gas minister Hardeep Singh Puri informed Parliament that alternate sources of fuel are being activated to ease pressure on liquefied petroleum gas (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,” said Puri. PDS refers to the public distribution system. The government has also asked state-run coal companies to increase supply to small and medium enterprises, and hotels and restaurants.
The on 28 February, followed by Tehran’s retaliation, plunged West Asia into crisis, eventually leading to a blockade of the Strait of Hormuz, causing a supply crunch of energy products. About 28 Indian-flagged ships are still stuck in the Persian Gulf.
India has an annual LPG requirement of 31-32 million tonnes (mt), of which about 60-65% is imported, making the country the world’s second-largest LPG importer. About 90% of overall imports come from West Asian countries, primarily from Saudi Arabia, Qatar, and the UAE.
As the government diverted gas supply to households, hotels and restaurants face a supply crunch. The government has now allocated 20% of the average monthly commercial LPG consumption to be disbursed by state governments in consultation with stakeholders.
Puri said LPG supplies have been regulated to prevent black marketing, not to penalize the hospitality sector. “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,” he said. “The government has therefore taken the responsible course: to regulate this channel with clear priorities and a transparent allocation mechanism.”
There haveof kitchen gas across the country, even though the government is prioritizing household users. Addressing the media on Thursday, Sharma said the daily booking of LPG in the country has gone up to 8 million from the usual 6 million cylinders.
About 5.5 million cylinders are delivered currently across the country, the official added. The daily domestic production of LPG has increased by 28% over the past week, she said.
Earlier in the day, Puri said panic buying was caused by anxiety rather than a supply shortage. The government is conducting anti-diversion raids and is expanding the digital authentication code system to cover 90% of the users from 50%.
The government has also asked television news channels to use a timestamp for visuals of queues of LPG cylinder buyers at retail depots to verify authenticity.
India imported 20.66 mt of LPG in FY25 valued at $12.48 billion. Imports in FY26 have already touched $9.88 billion by January. As of January, Indian refiners have produced 10.6 mt of LPG this fiscal, according to data from the Petroleum Planning & Analysis Cell (PPAC).
The country’s LPG consumption stood at 31.3 mt in FY25, and has reached 30.85 mt so far in FY26, with still two months to go in the fiscal
Speaking in Parliament, Puri assured citizens and the industry that power for their use is secured, as the loss of LNG imports from Qatar has been offset by imports from other sources.
“Large LNG cargoes are arriving on an almost daily basis through alternative supply routes, and India has sufficient gas production and supply arrangements to sustain this position even in the event of a prolonged conflict,” he said.
Puri also flagged that other South-East Asian countries are also rationing energy. “A country in our neighbourhood has shut all schools for two weeks, moved government offices to a four-day work week, ordered 50% of public employees to work from home, cut fuel allowances for official vehicles by half, and taken 60% of government vehicles off the road. This country has experienced the largest single fuel price increase in its history, with petrol up approximately 20% in a week,” he said, without naming Pakistan.