What Happened
- The central government relaxed petroleum safety and licensing rules to enable faster kerosene distribution to households across 21 states and Union Territories, as disruptions to LPG supply chains caused by the West Asia conflict created a shortage for domestic cooking fuel.
- Designated fuel stations in kerosene-free states and UTs have been permitted to store and distribute Public Distribution System (PDS) kerosene; each outlet can stock up to 5,000 litres, with up to two such stations permitted per district.
- An additional allocation of 48,000 kilolitres of kerosene was made to states over and above their regular supply.
- The relaxations are valid for 60 days or until further orders, with the Petroleum Ministry assuring that safety and monitoring standards remain in place to prevent diversion for adulteration.
- Kerosene has been reintroduced into the PDS network, with states directed to prioritise rural areas for distribution.
Static Topic Bridges
Public Distribution System (PDS) and Essential Commodities
The Public Distribution System (PDS) is the government's food and essential commodity security network, operating through a network of Fair Price Shops (FPS) across India. PDS originally distributed food grains, kerosene, sugar, and edible oils to beneficiaries at subsidised rates.
- The National Food Security Act (NFSA), 2013 restructured PDS with entitlements to Priority Households and Antyodaya Anna Yojana (AAY) households for subsidised food grains.
- Kerosene was historically distributed through PDS for cooking and lighting in rural and semi-urban areas before the push for LPG under the Pradhan Mantri Ujjwala Yojana (PMUY) reduced its importance.
- The move to make states "kerosene-free" was part of the government's fuel transition policy — several states had entirely discontinued PDS kerosene distribution before the current crisis.
- Essential Commodities Act, 1955 empowers the central government to regulate production, supply, distribution, and pricing of essential commodities.
Connection to this news: The government is effectively reversing or pausing the kerosene phase-out by reintroducing PDS kerosene in states that had already been declared kerosene-free, using emergency powers under petroleum regulations to respond to the LPG supply disruption.
India's Household Energy Mix: Cooking Fuel Transition
India has undergone a significant energy transition in household cooking fuels over the past decade, moving from traditional biomass (firewood, crop residues, dung cakes) and kerosene towards LPG and increasingly piped natural gas (PNG).
- Pradhan Mantri Ujjwala Yojana (PMUY), launched in 2016, provided free LPG connections to women from Below Poverty Line (BPL) households; over 10 crore connections have been provided under PMUY.
- Despite widespread LPG connection penetration, actual usage (refill rates) remains lower in rural areas due to the high cost of refills — making households revert to biomass or kerosene.
- India's LPG imports constitute a meaningful share of petroleum imports; disruptions to the Strait of Hormuz-routed supply directly affect LPG availability and pricing.
- PNG expansion under the City Gas Distribution (CGD) network is ongoing but limited to urban and semi-urban areas.
- Kerosene's health and environmental impacts (indoor air pollution) are well-documented; the shift away from kerosene was partly a public health measure.
Connection to this news: The LPG supply crunch has exposed a vulnerability in the household energy transition — households that shifted away from kerosene under government schemes now face an LPG shortfall, forcing a temporary reversal to PDS kerosene to prevent a cooking fuel crisis.
Petroleum and Natural Gas Regulatory Framework in India
Petroleum regulation in India operates through multiple legislative and institutional frameworks. The Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006 established an independent regulator for downstream petroleum and gas activities.
- PNGRB regulates refining, processing, storage, transportation, distribution, marketing, and sale of petroleum products and natural gas (but not production of crude oil or natural gas).
- The Ministry of Petroleum and Natural Gas retains pricing and policy authority, including emergency powers to modify distribution norms and allocation rules.
- Petroleum safety rules under the Petroleum Act, 1934 govern storage quantities, licensing for outlets, and handling procedures — the eased rules relax these storage limits for the emergency period.
- Oil Marketing Companies (OMCs) — Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) — implement distribution under government direction.
Connection to this news: The government's ability to rapidly relax storage limits and permit ad-hoc kerosene distribution through petrol pumps draws on emergency powers inherent in the petroleum regulatory framework, reflecting the flexibility built into these regulations for crisis situations.
West Asia Conflict and India's Energy Security
The February–March 2026 Israel-US military strikes on Iran and the subsequent Houthi entry into the conflict have severely disrupted global energy supply chains centred on the Strait of Hormuz and Red Sea shipping lanes. India imports a substantial share of its crude oil and LPG from the Gulf region.
- The Strait of Hormuz handles approximately 20% of global petroleum liquids and 20% of global LNG trade; its disruption has no viable alternative routing for most Persian Gulf oil.
- India imports crude oil primarily from Iraq, Saudi Arabia, UAE, and (since 2022) Russia; Gulf LPG imports for household use are separately sourced and more directly affected by the conflict.
- The International Energy Agency (IEA) activated its emergency mechanism, releasing 400 million barrels from strategic reserves globally in response to the supply shock.
- India maintains Strategic Petroleum Reserves (SPR) at Visakhapatnam, Mangaluru, and Padur with a combined capacity of approximately 5.33 million metric tonnes (about 39.1 million barrels).
Connection to this news: The LPG supply crunch that triggered the kerosene rule relaxation is a direct downstream effect of the West Asia conflict's disruption of the Strait of Hormuz shipping routes, illustrating the real-world impact of geopolitical events on India's household energy security.
Key Facts & Data
- Additional kerosene allocation: 48,000 kilolitres over regular supply
- Storage limit per designated outlet: 5,000 litres of PDS kerosene
- Outlets permitted per district: up to 2
- Duration of relaxation: 60 days or until further orders
- States/UTs covered: 21
- PMUY connections provided: over 10 crore
- India's Strategic Petroleum Reserve capacity: ~5.33 million metric tonnes (~39.1 million barrels)
- Strait of Hormuz: ~20% of global petroleum liquids flow daily (~20 million barrels/day in 2024)
- Brent crude: surpassed USD 100/barrel on March 8, 2026 (first time in four years)