Commercial LPG shortage brings back 2013 petrol pump closure proposal amid West Asia crisis; what lies ahead

LPG shortage: As tensions in West Asia escalate due to the ongoing conflict involving the United States, Israel and Iran, several Indian cities are beginning to face shortages of commercial LPG cylinders, affecting restaurants, hotels and small food businesses. The supply disruption has also revived debate around an old government proposal to restrict fuel sales at petrol pumps during night hours to reduce demand and manage imports.

Chartered Accountant Nitin Kaushik said the current situation has brought back discussions around a controversial 2013 plan that suggested shutting petrol pumps at night to control fuel consumption. “As LPG shortages hit businesses, India’s controversial 2013 plan to close petrol pumps at night is back in debate,” he said.

The shortage of commercial LPG comes at a time when global energy markets are under pressure due to supply disruptions linked to the conflict in West Asia. To manage domestic availability, the Union government has invoked provisions under the Essential Commodities Act to prioritise LPG supplies for households, hospitals and essential services. As a result, commercial allocations have been restricted in several regions, leading to supply stress for businesses.

What happened in 2013?

In September 2013, the Ministry of Petroleum and Natural Gas, led by then minister M. Veerappa Moily, proposed restricting petrol pump operations at night as part of efforts to reduce fuel consumption and control India’s rising oil import bill. The suggestion involved closing fuel stations between 8:00 PM and 8:00 AM, with the aim of cutting demand by about 3 percent and saving nearly ₹16,000 crore in foreign exchange at a time when the rupee had weakened sharply and the current account deficit was widening. The proposal drew strong criticism from opposition parties and industry groups, who warned it could disrupt daily life and affect jobs. Following the backlash, the Prime Minister’s Office did not approve the plan, and the ministry later clarified that no formal decision had been taken.

Limiting petrol pump operations

Kaushik explained that the proposal to limit petrol pump operations was originally introduced in 2013 by then oil minister M. Veerappa Moily. The plan suggested that petrol pumps across the country should operate only between 8 AM and 8 PM in order to reduce fuel demand and lower the country’s oil import bill.

At the time, India’s oil import bill had reached about ₹8.6 lakh crore. According to estimates cited during the proposal, even a 3% reduction in fuel demand could save nearly ₹16,000 crore annually. India had around 42,000 petrol pumps then, and policymakers believed controlled supply could discourage unnecessary fuel consumption.

However, the proposal faced strong opposition from multiple stakeholders, including fuel retailers, transport operators, logistics companies and highway infrastructure businesses. Critics warned that shutting petrol pumps at night could disrupt 24×7 logistics operations, affect highway transport, create problems for emergency services and lead to job losses in the fuel retail sector, which supports lakhs of direct and indirect workers. The plan was eventually dropped due to these concerns.

Supply challenges in LPG

The debate has resurfaced now as India faces fresh supply challenges in LPG and other fuels. Commercial LPG shortages are already impacting restaurants, hotels and catering businesses, while household demand continues to receive priority allocation.

India consumes about 31.3 million tonnes of LPG every year, and nearly 62% of this requirement is met through imports. A large share of these imports passes through the Strait of Hormuz, one of the world’s most critical energy routes, which has recently seen disruptions due to the conflict in West Asia. Iran has restricted movement in the region after attacks involving the United States and Israel, raising fears of supply interruptions.

The Strait of Hormuz carries about 20 million barrels of oil per day, nearly one-fifth of global consumption, along with around 20% of global liquefied natural gas trade. Production cuts in parts of the Gulf have added to the uncertainty, with Iraq and Kuwait reportedly reducing output amid shipping disruptions.

Officials say India is exploring alternative LPG supply arrangements with countries such as Algeria, Australia, Canada and Norway to reduce dependence on the Gulf region.

Experts say the return of the 2013 petrol pump closure debate highlights a deeper structural issue — India’s heavy dependence on imported energy. With the country importing more than 85% of its crude oil needs, global conflicts often force policymakers to consider demand-control measures during periods of crisis.