India has issued a directive to refiners across the country to maximise production of liquefied petroleum gas (LPG) and ensure that the fuel is supplied exclusively to three state-owned oil marketing companies- Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation. The order, issued on Thursday, reflects a policy priority to secure household cooking fuel supplies in the domestic market.

According to the government instruction, refiners must prioritise LPG output derived from propane and butane and ensure that the volumes are made available only to the three public sector fuel retailers. The directive also explicitly instructs refiners not to divert propane and butane toward petrochemical production. Additionally, the state-run oil companies have been asked to ensure that the LPG they receive is sold exclusively to domestic customers.

LPG is a widely used household cooking fuel in India and is produced primarily through refining processes and natural gas processing. It consists mainly of propane and butane, hydrocarbons that can also serve as feedstock for petrochemical manufacturing. The government’s decision to restrict their use to LPG production indicates a clear shift in resource allocation toward household energy security.

India’s LPG demand has grown significantly over the past decade, particularly following the expansion of government-backed cooking gas schemes aimed at improving access to clean cooking fuels in rural and low-income households. As a result, domestic consumption has steadily increased, while the country remains dependent on imports for a large share of its LPG requirements.

In this context, the latest directive appears designed to strengthen domestic availability of the fuel and avoid supply disruptions. By restricting refiners from diverting propane and butane toward petrochemical applications, the government is effectively ensuring that available feedstock is channelled into LPG production for cooking fuel.

The order also places responsibility on the three state-run oil marketing companies to direct LPG sales toward domestic consumers only. These companies together dominate India’s LPG distribution network, managing cylinder distribution, retail supply chains, and government subsidy-linked cooking gas programmes.