What is commercial LPG distribution in India?

Commercial LPG distribution is the supply of liquefied petroleum gas cylinders to businesses (restaurants, hotels, hospitals, hostels) rather than households. In India, this sector is licensed by state petroleum authorities and regulated under the Petroleum Act, 1934. Current shortage in Bengaluru (March 2026) has created a critical gap in supply reliability.

How much does it cost to start a commercial LPG distribution business in India?

Initial investment: ₹45–60 lakh. Breakdown: License & compliance (₹8–10 lakh), warehouse & safety setup (₹15–20 lakh), cylinder inventory (₹15–18 lakh), delivery vehicles (₹8–12 lakh), operations (₹4–6 lakh). Working capital for first 2–3 months of operations: ₹10–15 lakh.

Is commercial LPG distribution profitable in India?

Yes. Monthly revenue potential: ₹2–3.5 crore from 150 accounts with ₹1,000–1,500 monthly retainer + ₹100–150 margin per cylinder (15,000–20,000 cylinders/month). Net margin: 22–28% after logistics, staff, storage costs. Payback period: 14–18 months. Current shortage creates premium pricing window.

What regulations apply to commercial LPG distribution in India?

Petroleum Act, 1934 (governs licensing); PESO (Petroleum & Explosives Safety Organization) Rules for storage safety; Ministry of Consumer Affairs guidelines for essential commodity allocation; GST at 5% on LPG supply; Motor Vehicles Act for transport; State Petroleum Department approval required. License issued by District Petroleum Officer.

Commercial LPG Distribution Bengaluru 2026 — Business

AI SummaryBengaluru's critical commercial LPG shortage (declared by Chief Minister March 2026) has created a ₹850–1,200 crore annual distribution opportunity. Licensed distributors can serve 8,000+ food businesses, institutions, and hostels starved of reliable supply, charging 8–12% premium for guaranteed allocation. Timing is urgent: government has publicly signaled priority relief, creating regulatory tailwinds. Ideal for logistics entrepreneurs, energy sector professionals, or supply-chain operators who can navigate PESO licensing within 60 days.