Kochi: Kerala's hospitality and commercial sectors are bearing the brunt of a deepening cooking gas shortage after a stringent 'Revised Order' from the Ministry of Petroleum and Natural Gas effectively halted the supply of commercial LPG cylinders.

The order, issued on March 9, 2026, to oil marketing and refining companies, prioritises domestic cooking gas distribution by directing that all available Liquefied Petroleum Gas (LPG) production components be diverted exclusively to the domestic pool, and the LPG thus procured is supplied/marketed solely to domestic consumers, LPG only.

By reiterating an earlier directive issued on March 5, the move has severely disrupted the supply chain for commercial users, leaving hotels, restaurants and other businesses struggling to secure cooking gas. The order invoked the Essential Commodities Act, 1955, and the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999, to ensure "uninterrupted supply" of fuel to Indian households.

The Centre has directed all domestic and SEZ oil refining companies, including petrochemical complexes, to maximise the production of specific chemical streams like Propane, Butane, and Propylene to be used solely for LPG.

The order explicitly stated that all domestic/SEZ oil refining companies shall maximise and ensure that entire production of C3 and C4 streams is utilised for the production of LPG pool and make it available to the three public sector oil marketing companies (OMCs) viz. IOCL, HPCL and BPCL only. Furthermore, these companies are now prohibited from using these materials for other industrial purposes. 

For the hospitality industry, the most critical blow comes from a specific marketing restriction placed on the three public sector OMCs. The ministry has ordered, "All Public sector OMCs shall ensure that LPG so procured is supplied/marketed solely to consumers of domestic LPG only".

Since hotels and restaurants rely on commercial-grade cylinders rather than the subsidised 14.2kg domestic cylinders, this mandate effectively freezes the primary supply source for the hospitality industry. With OMCs like IOCL, BPCL, and HPCL handling over 99% of domestic LPG consumed in the country, there are few alternative avenues for businesses to secure bulk fuel.

As the hospitality sector in hubs like Kochi and across Kerala begins to process the implications, industry experts warn that the sudden shift could lead to a spike in operating costs or a shortage of commercial cylinders if private refiners cannot fill the massive void left by the public sector OMCs.

The Kerala Hotel & Restaurant Association (KHRA) has warned that hotels across the state are being forced to shut down due to the non-availability of commercial LPG cylinders.

In a statement issued by KHRA, they have said that the distribution of commercial cooking gas cylinders has come to a standstill. The association noted that once the current buffer stocks in hotels are exhausted, even the restaurants that are currently operational will be forced to close their doors.

"If the industry grinds to a halt, tens of thousands of individuals who depend on this sector for their livelihood will be rendered unemployed. A total shutdown will cause severe difficulties for the general public, particularly students, workers, and patients who rely on hotels for their daily meals," KHRA said.

The KHRA has submitted a formal memorandum to the Prime Minister, the Union Petroleum Minister, and the Chief Minister of Kerala, urging an immediate resolution to this fuel crisis.

Association President G Jayapal has demanded that the government treat cooking gas as an essential commodity for the hotel industry, similar to the priority given to domestic consumers, and take emergency measures to restore supply.

Aswathy, who is employed in a private firm in Kochi, left for her residence in Pathanamthitta on Tuesday after she was told that the hostel mess would be shut down. "It has become a huge inconvenience for all of us. Due to the LPG shortage, we have been forced to leave the hostel," said Aswathy.