What Happened
- The Central government issued an emergency notification restoring Public Distribution System (PDS) kerosene allocation to 21 states and Union Territories that had previously been declared "kerosene-free" — a significant policy reversal driven by the LPG supply crisis caused by the West Asia conflict.
- India imports approximately 60% of its LPG, with 85–90% of imports routed through the Strait of Hormuz, which was effectively closed after the US-Iran military conflict began on February 28, 2026.
- The ad hoc kerosene allocation is valid for 60 days or until further notice; states/UTs covered include Delhi, Chandigarh, Haryana, Punjab, Uttar Pradesh, Rajasthan, Goa, Madhya Pradesh, and Gujarat, among others.
- Agents and dealers operating these kerosene distribution points are exempted from obtaining fresh licences for decanting operations, while tank vehicles with existing permits require no additional authorisation — subject to strict Petroleum and Explosives Safety Organisation (PESO) safety compliance.
- The measure is intended to bridge the household cooking and lighting fuel gap for vulnerable populations, particularly in rural and peri-urban areas where LPG cylinder shortages are most acute.
- Separately, the government has also directed refineries under the LPG Control Order (March 8, 2026) to maximise cooking gas output — a production-side response complementing this distribution-side measure.
What "Kerosene-Free" Status Means
Over the preceding decade, under the drive to expand LPG access and reduce kerosene diversion/adulteration, numerous states voluntarily achieved "kerosene-free" status by eliminating their PDS kerosene quota. These states had successfully transitioned their beneficiaries to LPG (aided by PM Ujjwala Yojana) and no longer received central PDS kerosene allocations. The current reversal highlights the fragility of this transition when the underlying LPG supply chain is disrupted.
Static Topic Bridges
PDS Kerosene and the Transition to Clean Cooking Fuels
Kerosene has historically been distributed through India's Public Distribution System (PDS) as a household fuel for cooking and lighting, particularly for BPL and low-income households. However, kerosene combustion produces significant indoor air pollution (particulate matter, carbon monoxide), and PDS kerosene has been plagued by diversion (to adulterate petrol/diesel) and leakages. The government's policy since 2015-16 has been to phase out PDS kerosene allocation by transitioning households to LPG.
- India's PDS kerosene allocation at its peak was approximately 11,000 kilo litres per month; it declined sharply as states adopted "kerosene-free" status.
- Ministry of Petroleum and Natural Gas tracks "kerosene-free" states; achieving this status is a milestone in clean fuel transition.
- Kerosene is a controlled commodity under the Kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993.
- Diversion of PDS kerosene to the black market (for adulteration of transport fuels) was historically a major economic leakage in the subsidy system.
- Household kerosene combustion is associated with respiratory diseases, particularly affecting women and children who spend more time near cooking fires.
Connection to this news: The reversal of "kerosene-free" status for 21 states is a direct consequence of an LPG supply disruption that the policy framework did not anticipate, demonstrating that clean fuel transition requires not just access infrastructure but also supply chain resilience.
India's LPG Supply Chain and Strategic Vulnerabilities
India's LPG supply chain has three sources: domestic refinery production (primarily from natural gas processing and crude oil refining), imports from Gulf countries (Saudi Aramco, ADNOC, others), and liquefaction/gasification infrastructure at coastal terminals. The West Asia crisis exposed that domestic production capacity is structurally insufficient to meet demand, and that no meaningful strategic LPG buffer stock exists.
- India's domestic LPG production: approximately 14–15 million tonnes per year; total demand: ~25 million tonnes — necessitating the ~60% import share.
- India's largest LPG import source: Saudi Arabia's Saudi Aramco (under long-term supply contracts with Indian OMCs).
- LPG import terminals: located at Kandla, Cochin, Mangaluru, Haldia, and other ports; inland supply depends on rail and road logistics.
- LPG Control Order (March 8, 2026): redirected all C3/C4 hydrocarbon streams (propane, butane, propylene, butenes) from refinery operations to OMCs — increased domestic production by 28% within 5 days.
- Strategic LPG storage: India has none of comparable scale to its crude oil SPR (5.33 MMT at Padur, Visakhapatnam, Mangaluru caverns).
Connection to this news: The emergency kerosene restoration is a stopgap measure filling the gap that a strategic LPG reserve would have prevented — underscoring the policy imperative of developing LPG-specific emergency storage.
Essential Commodities Act and Emergency Energy Management
The government's authority to issue emergency directives for kerosene allocation, redirect refinery output, and regulate LPG distribution flows from a combination of statutes: the Essential Commodities Act (ECA) 1955, the Petroleum and Natural Gas Regulatory Board (PNGRB) Act 2006, and sector-specific control orders. These instruments allow the state to override normal market distribution during supply emergencies.
- Essential Commodities Act, 1955 (ECA): empowers the central government to control production, supply, and distribution of "essential commodities" — petroleum products including LPG and kerosene are explicitly covered.
- PESO (Petroleum and Explosives Safety Organisation): operates under the Department for Promotion of Industry and Internal Trade (DPIIT); regulates safety standards for storage and handling of petroleum products including kerosene and LPG.
- The 60-day emergency kerosene order does not require states to re-register as "kerosene-supplied" — it is explicitly framed as a temporary, ad hoc measure to preserve the long-term clean fuel transition goal.
- Oil Marketing Companies (IOC, BPCL, HPCL) are responsible for actual allocation and distribution under government directives.
Connection to this news: The deployment of the Essential Commodities Act framework to restore emergency kerosene supplies illustrates how India's energy regulatory architecture allows rapid state intervention during crises, but also highlights the dependence on ex-post emergency powers rather than proactive supply security infrastructure.
Key Facts & Data
- Number of states/UTs receiving emergency PDS kerosene: 21 (including Delhi, Haryana, UP, Gujarat, Rajasthan, Goa, MP)
- Duration of kerosene order: 60 days (or until further notice)
- West Asia conflict start: February 28, 2026 (US-Iran)
- India's LPG import dependence: ~60% of total demand; ~90% of imports via Strait of Hormuz
- PMUY active connections (January 2026): ~104.29 million (10.43 crore)
- Total active domestic LPG connections: ~332.1 million (33.21 crore)
- LPG Control Order (March 8, 2026): 28% production increase within 5 days
- India's SPR: ~5.33 MMT crude oil (no LPG strategic reserve)
- Safety regulator: PESO under DPIIT
- Regulatory framework: Essential Commodities Act 1955, PNGRB Act 2006