India Relaxes C3 C4 Streams Allocation Amid LPG Crisis

India has eased restrictions on C3 and C4 streams allocation, offering relief to industries hit by a recent squeeze in petrochemical feedstock.

The move allows oil refining and petrochemical companies to divert minimum quantities of propane, butane, propylene, and butenes to critical sectors such as pharmaceuticals, chemicals, petrochemicals, and food distribution.

This update on C3 and C4 streams allocation comes as the country balances fuel needs with industrial demand. The Centre for High Technology (CHT), under the Ministry of Petroleum and Natural Gas, will oversee sector-wise distribution in consultation with relevant ministries.

This follows the government’s earlier directive on March 9 mandating that all C3 and C4 streams be used entirely for LPG production to meet domestic demand, which tightened supplies for petrochemical-dependent industries.

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To ease pressure, the government has also granted full Customs duty exemption on key petrochemical imports until June 30, 2026. The decision is expected to result in a revenue loss of around Rs 1,800 crore over three months, depending on market conditions.

India is facing an energy supply crunch, especially in LPG, due to ongoing tensions in West Asia. Global oil markets remain volatile, with Brent crude rising over 8 percent to USD 106.66 per barrel. Prices had already surged to USD 110–120 per barrel in March, while Asian LNG nearly doubled to USD 20–25/MMBtu.

“In March, Brent crude increased to USD 110–120/bbl, while spot prices of Asian liquefied natural gas (LNG) nearly doubled to USD 20–25/MMBtu. We expect the prices of these two commodities to remain elevated and volatile in April as well,” said Sehul Bhatt, director at Crisil Intelligence.

Supply uncertainty and longer shipping routes continue to keep import costs high, even as demand shows early signs of slowing.