India Turns to Dirty Fuels to Fight Crippling Supply Squeeze

(Bloomberg) -- India is turning to polluting fuels such as biomass, kerosene and fuel oil as war-led gas shortages weigh on households and industries across the country.  

“Alternative fuel options are being activated to ease pressure on liquefied petroleum gas and gas channels,” Oil Minister Hardeep Puri told Parliament on Thursday. “Kerosene is being made available through retail outlets and public distribution channels and fuel oil is being made available for industrial consumers.” 

The South Asian nation imports nearly 90% of its crude, half of its liquefied natural gas and two thirds of its LPG, most of which comes from the Middle East and travels through the Strait of Hormuz. With the narrow passage currently blocked, shortages have already affected supplies to hotels, restaurants and petrochemical plants. 

As the news of restaurants halting operations flooded social media platforms, Puri informed lawmakers that the hospitality industry could be allowed to use polluting fuels for a month, a move expected to free up LPG volumes for households, a priority for the government. 

The ministry of environment has advised state pollution control agencies to allow commercial kitchens to use pellets made of municipal waste, coal, kerosene and biomass, according to Puri.

Vast swathes of the country suffer from poor air quality for most of the year. The government set out to curb the widespread consumption of polluting fuels, such as biomass and kerosene, by promoting the use of cleaner alternatives like LPG and natural gas. Thanks to those efforts, kerosene consumption fell to 408,000 tons in the year through March 2025, compared with 7.09 million tons a decade back.

Supplies of natural gas, used in factories, home kitchens and power plants, have also been disrupted by the war. While households and vehicles are currently served as normal, volumes have been reduced for industrial consumers and fertilizer plants.   

The minister assured parliament that the country didn’t face any shortage of gasoline, diesel, kerosene, jet fuel and fuel oil. “Retail outlets across the country are stocked and supply chains for these products are functioning normally,” Puri said.

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