Pune: The ministry of petroleum and natural gas on Friday clarified that there is no ban on commercial liquefied petroleum gas (LPG) cylinder supply after a recent order triggered widespread confusion among LPG distributors and hospitality industry bodies in Maharashtra, with some interpreting it as a directive to halt supplies to establishments such as restaurants and hotels. A senior ministry official told TOI that the directive had been misread and does not prohibit sale of LPG cylinders to commercial establishments such as hotels, restaurants and shops. “There is no ban on commercial LPG supply. Other existing sources of LPG will continue to supply to commercial establishments. There is no ban,” the official said, adding that the order had been “misconstrued and misread”. Commercial LPG supplies were resumed by the three public sector oil marketing companies after the petroleum ministry’s clarification. The confusion arose from a clause in the order which stated that public sector oil marketing companies (OMCs) must ensure LPG procured under the directive is supplied or marketed solely to domestic LPG consumers. Clarifying the provision, the official said the clause applied only to additional LPG that will now be produced after diverting propane and butane streams that were earlier used in petrochemical manufacturing. “The LPG referred to in that clause is linked to the earlier points in the order, which deal with propane and butane streams that were previously being used for petrochemical production. These will now be diverted to produce LPG, and that LPG will be supplied to the oil marketing companies for domestic LPG purposes,” the official said. The order, issued under the Essential Commodities Act, 1955, directed all oil refining companies operating in India to maximise production of LPG from propane and butane streams produced, recovered, fractionated or otherwise available with them. It stated that these streams must be utilised for LPG production and supplied only to the three public sector OMCs — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). Refineries were also directed not to divert, utilise, process, crack, convert or otherwise employ propane or butane streams for the manufacture of petrochemical products or other downstream derivatives. The order said, “All public sector OMCs shall ensure that LPG so procured is supplied/marketed solely to consumers of domestic LPG only.” This point was misconstrued by multiple distributors, OMCs as well as hospitality establishments, the official said. The official added that the ministry held a meeting with all public sector oil marketing companies on Friday to clarify the intent of the order after confusion over its interpretation. The official said the directive had been misread by some stakeholders, leading to the impression that commercial LPG supply had been barred. HPCL’s communication to its commercial customers also suggested that the order had been interpreted as restricting supply to non-domestic users. In a letter issued on Friday to industrial and commercial LPG customers, the company advised them to explore alternate fuel arrangements, citing the ministry’s directive that “LPG be supplied and marketed solely to domestic consumers.” The earlier communication, issued by HPCL’s Aurangabad LPG regional office, had referred to prevailing geopolitical conditions affecting the global LPG supply chain and said this had impacted LPG inventories. In view of the directive and the current supply constraints, HPCL said it may face limitations in continuing LPG supplies to industrial and commercial customers for the time being and asked customers to make necessary arrangements to meet their institutional fuel requirements.
