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Amid geopolitical shocks and reduced LNG availability from West Asia, India has allowed a short-term return of PDS kerosene for household cooking and lighting in 21 states and Union Territories.
Production and consumption have plunged over the past decade as LPG and electrification expanded.
The government now treating kerosene as a stopgap fuel to protect vulnerable homes from price spikes and supply risks.
Geopolitical turbulence in global energy markets has prompted India to briefly revisit a fuel it had almost phased out.
In a notification issued on March 29, 2026, the government temporarily allowed the reintroduction and streamlined distribution of Public Distribution System (PDS) kerosene, also known as superior kerosene oil (SKO), for household use. The measure will remain in force for 60 days, or until further orders, and covers 21 states and Union Territories, including several previously classified as “SKO-free”.
The move comes at a time when kerosene has already receded to a marginal role in India’s energy system. Data from Energy Statistics India 2026, published by the Union Ministry of Statistics and Programme Implementation (MoSPI), show that kerosene production stood at about 1 million tonnes (provisional) in the 2024-25 financial year, down sharply from 7.6 million tonnes in 2014-15.
Consumption has also declined steeply, falling from 6.83 million tonnes in 2015-16 to about 408,000 tonnes in 2024-25 (provisional), with most of the remaining demand coming from households.
Against this backdrop, the temporary reintroduction of kerosene highlights the vulnerabilities that geopolitical shocks can expose in national energy systems. The government’s move aims to safeguard household energy access in the event of supply disruptions or price spikes affecting primary fuels such as liquefied petroleum gas (LPG) or electricity, particularly amid the closure of the Strait of Hormuz — a critical chokepoint that carries roughly one-fifth of global oil and liquefied natural gas (LNG) flows.
To facilitate quicker distribution, the notification introduces regulatory relaxations. Public sector oil marketing companies (OMC) have been permitted to store up to 2,500 litres of kerosene at existing service stations, with the cap extendable to 5,000 litres at designated outlets. Licensing requirements for dealers and transport vehicles have also been eased.
The order restricts kerosene strictly to household cooking and lighting, positioning it as an emergency fuel rather than a permanent policy shift.
The increased allocation was necessary because of reduced LNG availability due to the West Asia conflict, prompting a search for alternative fuels that could be quickly deployed, officials told The Times of India. Kerosene was considered a viable option because it can be readily produced through crude oil refining and used without major infrastructure changes.
For decades, kerosene was central to India’s household energy system. Distributed through the PDS via fair price shops, subsidised kerosene provided lighting and cooking energy to millions of households that lacked electricity or modern cooking fuels.
The scale of this dependence was significant. The 2011 Census, conducted by the Union Ministry of Home Affairs, found that 43 per cent of rural households used kerosene as their primary lighting source, while 0.7 per cent used it as their main cooking fuel. At the time, India accounted for around 15 per cent of global kerosene consumption, according to the United States Energy Information Administration.
Subsidies for the fuel were substantial. In FY16, kerosene subsidies amounted to Rs 11,496 crore, accounting for 41.7 per cent of total fuel subsidies of Rs 27,571 crore, according to the Ministry of Petroleum and Natural Gas (MoPNG). However, the system was plagued by inefficiencies and diversion, with leakage rates estimated at over 40 per cent.
These concerns, combined with the government’s push towards cleaner fuels, led to a gradual dismantling of the kerosene subsidy. Beginning in 2016, prices were increased through fortnightly revisions, and by February 2021, the subsidy was effectively phased out. The policy shift coincided with the expansion of the Pradhan Mantri Ujjwala Yojana, which sought to transition low-income households to LPG.
The retreat of kerosene from India’s energy landscape has been stark.
Kerosene is classified as a middle distillate petroleum product, alongside diesel and aviation turbine fuel. Together, these middle distillates account for 48.5 per cent of India’s petroleum production. Within this category, overall output grew modestly — registering a year-on-year increase of 2.16 per cent in 2024-25 (provisional) and a compound annual growth rate of 1.7 per cent between 2014-15 and 2024-25, according to the Energy Statistics India 2026 report.
Kerosene itself, however, has moved in the opposite direction. While production recorded a year-on-year rise of 2.6 per cent in 2024-25 (provisional), it shows a long-term contraction, with a compound annual decline of nearly 20 per cent over the past decade.
Consumption patterns reflect a similar trend. Total kerosene consumption fell sharply from 6.83 million tonnes in FY16 to just 408,000 tonnes in 2024-25 (provisional). Although there was a year-on-year increase of 14.84 per cent in FY25, the long-term growth rate between FY16 and FY25 stood at –26.88 per cent, according to the energy statistics report.
Of the 408,000 tonnes consumed in 2024-25, about 230,000 tonnes were used in households, followed by 63,000 tonnes in commercial and public services and 115,000 tonnes in other sectors. Its negligible presence in industrial or large-scale economic activity underscores its residual role in the energy system.
Price trends reinforce kerosene’s declining relevance. Wholesale Price Index (WPI) data show that kerosene prices have been volatile over the past decade. The index rose from 88.4 in 2015-16 to a peak of 402.6 in 2022-23, driven by post-pandemic disruptions in global energy markets and elevated crude oil prices.
The trend has since reversed. The index declined to 332.2 in 2023-24 and further to 301.6 in 2024-25 (provisional), marking a year-on-year drop of 9.21 per cent — the steepest decline among major energy commodities.
Household survey data also show how marginal kerosene has become in everyday use. According to the National Family Health Survey (NFHS-5) 2019-21, conducted by the Union Ministry of Health and Family Welfare, only 0.4 per cent of Indian households reported kerosene as their primary cooking fuel.
Similarly, the National Sample Survey Office (NSSO) Multiple Indicator Survey 2020-21 (78th Round) found extremely low reliance on kerosene nationwide. At the all-India level, just 0.1 per cent of rural households and 0.5 per cent of urban households reported kerosene as their primary cooking fuel.
A few pockets still record relatively higher use. The survey found kerosene use at 2.0 per cent in rural Meghalaya and 3.9 per cent in urban Meghalaya, 12.4 per cent in rural Lakshadweep and 6.9 per cent in urban Lakshadweep, and 5.6 per cent in urban Ladakh, while most other states report negligible levels.
Despite its declining role, kerosene continues to appear in policy debates largely because of affordability concerns surrounding LPG. Its temporary return reflects ongoing affordability challenges in the clean cooking energy transition, according to Swasti Raizada, senior policy advisor at the International Institute for Sustainable Development (IISD).
“We have an affordability problem with domestic LPG use,” Raizada told DTE. “Given that LPG is subsidised for domestic consumers, the government has brought in kerosene to ensure energy access for consumers who may not be able to afford LPG even with the government subsidy.”
Raizada noted that many households that shifted to LPG continue to maintain multiple fuel options. “What we have found in our work is that households often use a mix of fuel sources. There are cyclical periods when LPG prices rise sharply and become unaffordable, which leads to fuel switching, especially in rural areas,” she said.
At the same time, she emphasised that the government is unlikely to support kerosene infrastructure in the long term. “Supporting kerosene based appliances could send a signal that kerosene is a long-term option, which goes against the broader direction of India's clean cooking transition. The current intent is to allow kerosene use only as a temporary, stopgap measure,” she said.
India has spent the past decade steadily pushing kerosene out of its household energy system through rural electrification and expanded LPG access. Yet geopolitical shocks — from conflicts disrupting oil markets to price volatility straining household budgets — can quickly reopen space for legacy fuels.
The temporary revival of PDS kerosene highlights the delicate balance between energy security and the energy transition. Once the cornerstone of rural energy access, the fuel now survives largely as a contingency measure — a reminder that even as countries move towards cleaner energy systems, older fuels can re-emerge when global markets are shaken.