India has directed all its refiners to maximise LPG production for sale to state-run oil marketing companies, amid a has squeeze stemming from the Iran war.
Only Indian Oil, HPCL and BPCL can buy this LPG, which in turn can be sold only to domestic customers, according to a government order released on Friday (6 March 2026). The order also asked refiners to avoid using propane and butane for petrochemical production. LPG is a combination of propane and butane.
India, which imports nearly 85% of its oil and gas needs, is staring at an energy crisis after Qatar closed the world’s largest LNG terminal in Ras Laffan after it faced a drone attack by Iran. Tehran has also blocked the Strait of Hormuz, which carries nearly half of India’s oil and gas imports — every day.
To be sure, New Delhi has managed to secure crude oil supply after Indian Oil and others pivoted to Russian oil, after permission from the United States. They have snapped up nearly 20 million barrels of seaborne Russian Urals in less than a day since US Treasury Department allowed India to do so.
“To enable oil to keep flowing into the global market, the Treasury Department is issuing a temporary 30-day waiver,” said Treasury Secretary Scott Bessent in a statement on Thursday (5 March 2026). He characterised the move as a “stopgap measure”, noting that it authorises only transactions involving oil already at sea to prevent a significant financial windfall for Moscow.
As part of the interim India-US trade deal, New Delhi has agreed to abstain from Russian oil imports, which, according to Washington DC, is fuelling Russia’s war in Ukraine.