The government has directed refineries to divert a portion of the C3 and C4 feedstock — propane, butane, propylene, butenes —used to make LPG to critical sectors such as pharma and food, which are hit by shortage of petrochemicals.
The government on Thursday directed refining companies including petrochemical complexes to make available certain minimum quantities of C3 and C4 streams for critical sectors like Department of Pharmaceuticals, Department of Food & Public Distribution, Department of Chemicals & Petrochemicals, etc based on specific quantity and refinery source as determined by the Centre for High Technology (CHT).
Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas (MoPNG), said that all feedstock streams were diverted for LPG production due to the acute shortage of the cooking medium on account of closure of the Strait of Hormuz.
She was speaking at the daily inter-ministerial briefing on West Asia.
“Certain other sectors which also need some of these molecules are facing a shortage and thereby this decision has been taken,” Sharma added.
Windfall tax
The Department of Revenue also clarified that the windfall tax on jet fuel and diesel will not be applicable to Reliance Industries (RIL) SEZ refinery.
“As per judicial pronouncements on this issue, the special additional excise duty and additional excise duty are not applicable on SEZ refineries,” said JS Kandhari, Joint Secretary in the Department of Revenue, said.
The government reinstated the windfall tax, first introduced in 2022, amid disruptions to global energy supplies caused by the West Asia conflict.
Sharma emphasised that there is no shortage of petrol and diesel in the country and the regular retail prices for the two auto fuels is unchanged. This is despite the PSU oil marketing companies’ (OMCs) under recovery rising to ₹24.40 per litre on Petrol and ₹104.99 on Diesel.
Oil Secretary Neeraj Mittal on Thursday chaired a meeting with Additional Chief Secretaries and Principal Secretaries (Food & Civil Supplies) of all States and Union Territories to review the fuel supply situation across the country.
Mittal stressed that States/UTs must actively manage and prioritise LPG distribution to ensure uninterrupted supply for domestic consumers and essential sectors. States were also advised to maintain strict vigilance against hoarding, diversion, and the spread of misinformation that could trigger unnecessary panic.