Manali Petrochemicals Halts Plant 1 Operations Amid Propylene Shortage

Manali Petrochemicals has temporarily suspended operations at its Plant-1 site in Manali, Chennai, after Chennai Petroleum Corporation (CPCL) stopped supplying propylene. The company said operations at Plant-1 were halted from 12 March 2026 following a “complete stoppage” of propylene supply. MPL produces propylene oxide and related petrochemical products used in applications including polyols, pharmaceuticals, construction materials and specialty chemicals.

However, MPL's Plant-2 continues to operate for now using available feedstock inventory, and any further developments will be disclosed as required. The company termed the shutdown a force majeure event, stating that it arose from a sovereign regulatory directive issued by the Government of India and is beyond its control.

According to the company, the stoppage of propylene supply follows an order issued by the MoPNG directing CPCL to prioritise the production of Liquefied Petroleum Gas (LPG) from crude oil processed at its refinery. The directive mandates that crude oil processed at CPCL’s refinery be directed exclusively and on a priority basis toward LPG production in order to ensure domestic fuel availability and strengthen national energy security.

The government’s move comes amid significant disruptions to international crude oil and petrochemical supply chains caused by the ongoing geopolitical conflict in the Middle East, the company said. “The likely impact of the force majeure, which is currently an ongoing event, cannot be estimated at this point of time,” the company said in its filing.

Source: Business Line