Amid pressure arising from the Iran war, India has directed all its refiners to maximize LPG production for sale to state-owned oil marketing companies.
According to a government order issued on Friday (6 March 2026), only Indian Oil, HPCL and BPCL can buy this LPG, which can be sold only to domestic customers. 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 about 85% of its oil and gas needs, is facing an energy crisis after Qatar closed the world’s largest LNG terminal at Ras Laffan after facing a drone attack by Iran. Tehran has also blocked the Strait of Hormuz, which carries about half of India’s oil and gas imports every day.
Certainly, New Delhi has managed to secure crude supplies after Indian Oil and others turned to Russian oil, following permission from the United States. Since the US Treasury Department gave India permission to do so, they have seized nearly 20 million barrels of Russian Urals arriving by sea in less than a day.
“To keep oil flowing into global markets, the Treasury Department is issuing a temporary 30-day waiver,” Treasury Secretary Scott Besant said in a statement Thursday (March 5, 2026). He described the move as a “stopgap measure”, noting that it authorized transactions involving oil already at sea to prevent a significant financial windfall for Moscow.
As part of the interim India-US trade agreement, New Delhi has agreed to refrain from importing Russian oil, which Washington DC says is fueling Russia’s war in Ukraine.