The fuel frenzy: rising kerosene prices in Keralam

Around 4 p.m. at the Vizhinjam fishing harbour on the outskirts of Thiruvananthapuram district in Keralam, dark clouds gather ominously over the sea. A sudden, intense downpour accompanied by lightning lashes parts of the district.

Around the harbour, fishermen linger, looking skywards and weighing their options. Some appear to be returning to shore in a hurry, seemingly heeding warnings of deteriorating weather. Others remain undecided, reluctant to lose another day’s earnings, while a few seem determined to venture out, despite the gathering storm.

They begin preparing their boats for departure, carrying cans of kerosene and petrol to refuel their engines. The decision to venture into the sea is never an easy one for traditional fishermen, whose livelihoods depend on the vagaries of weather, currents and fish availability.

But increasingly, another uncertainty has come to dictate their daily calculations.

For fishermen like Muthappan K.J. of Chowara, kerosene shortage has become an additional burden in an already precarious occupation. He says the price of kerosene has risen sharply in recent months, while declining catch and the need to travel farther into the sea have pushed up operating costs.

“Kerosene prices have climbed from around ₹103 to ₹157 a litre within six months. With the subsidised supplies available through Matsyafed outlets, the government-run cooperative, insufficient to meet our fuel needs, we are forced to procure the balance from retailers at higher rates,” he points out.

Despite the government announcing hikes in subsidies, delays in reimbursing the subsidy allocation to suppliers that could extend up to six months affect the supply chain. Under such circumstances, fishermen are increasingly forced to rely on the black market. Kerosene stocks brought in from Tamil Nadu are part of such “informal arrangements,” Muthappan says.

Johnny of Vizhinjam adds that changes in fishing patterns have led to higher fuel bills. Higher temperatures and the movement of fish into deeper waters have forced traditional boats that normally operate closer to the coast to travel farther in search of catches.

The immediate trigger for the shortage is the steady reduction in the quantity of subsidised kerosene allocated to Keralam by the Union government.

Keralam has traditionally depended on kerosene to operate outboard motors used by small fishing crafts. The subsidised fuel distributed through the public distribution system (PDS) has served as an important source of support for fishing communities, even as the Centre has sought to restrict kerosene consumption as part of its clean-energy transition.

A senior official of the Food and Civil Supplies department says the Centre progressively restricted the purpose for which the allocated kerosene can be used. Earlier, subsidised and non-subsidised supplies were available under different categories, and kerosene supplied through the Centre could also meet the requirements of the fishing sector.

Subsequently, the State was directed to use white kerosene specifically for fishing activities, leading to a separate arrangement under which Matsyafed supplied the fuel on a non-subsidised basis. A separate allocation of non-subsidised blue kerosene that could be diverted for fishing purposes was also discontinued around two years ago.

The annual allocation in this regard fell from 37,056 kilolitres (KL) in 2020-21 to 25,920 KL in 2021-22, 15,552 KL in 2022-23 and 7,776 KL in 2023-24. The allocation declined further to 3,120 KL in 2024-25 and 1,854 KL in 2025-26.

Also Read : Lack of port-driven industrial ecosystem deprives Kerala from tapping Vizhinjam’s potential

“The Centre’s allocation is now intended primarily for distribution through ration shops. However, the State government continues to earmark a portion of available quantity for fishing activities, considering the dependence of traditional fisherfolk on kerosene,” the official explains.

At the same time, the government finds the available quantity inadequate even to maintain the existing distribution pattern for ration-card holders, let alone meet the requirements of fishermen. While the rise in market prices has increased, the retail price of PDS kerosene also increased from ₹71 to ₹77 a month ago.

Keralam has approximately 36,000 outboard engines, the majority of which use kerosene as the primary fuel, according to the Fisheries department.

The department acknowledges the need to move towards cleaner energy, prompting schemes to facilitate the conversion of kerosene-operated outboard motors (OBMs) to petrol and LPG-run engines. An outlay of ₹1.95 crore was recently sanctioned for the initiative during the current financial year.

The scheme is intended to facilitate the gradual replacement of OBMs through subsidies. The department hopes that the transition will reduce maintenance and repair costs associated with kerosene engines, while lowering greenhouse gas emissions and environmental pollution.

However, in order to achieve its goal of phasing out OBMs, the government will have to overcome the wide perception among the fishing community that the Japanese kerosene-powered engines are more reliable when boats need to accelerate or negotiate choppy waters.

Fisheries officials point out that the hesitation among fishermen partly reflects misconceptions about the long-term advantages of alternative fuels. They plan to increase awareness of the benefits of petrol and other cleaner propulsion systems.

Matsyafed has targeted the conversion of around 200 fishing boats a year. The agency facilitated the conversion of 177 engines under the scheme last year, according to an official.

Jackson Pollayil, president of the Kerala Swatantra Matsyathozhilali Federation, says the fishing community is reluctant to take risks with expensive engine conversions without assurances that technical problems will be addressed. There are also concerns about the availability of LPG supplies and the role of intermediaries in determining prices.

Jackson adds the immediate priority should be to ensure affordable fuel supplies while the transition takes place. The federation has called for fuel to be made available at fair and affordable rates, exempt from the Goods and Services Tax, through existing Fisheries department outlets and without restrictive quantity limits for fishermen who depend on outboard and inboard engines.

The crisis extends well beyond the fishing harbours. The reduction in kerosene allocations has also disrupted supplies through ration shops, leaving households uncertain whether they will receive even their reduced entitlement.

During the financial years 2023-24 and 2024-25, the allocation of kerosene in PDS was significantly reduced, standing at 11,076 KL and 4,368 KL, respectively. Although the allocation increased in 2025-26 to 24,420 KL, the supply has subsequently nosedived.

For the October-December quarter of 2026-27, the Centre has made an allocation of 4,068 KL, much lower than the allocation of 5,676 KL in the previous quarter.

T. Muhammedali, general secretary of the All Kerala Retail Ration Dealers’ Association, says a sharp reduction in the allocation left many ration shops unable to supply kerosene to even half their cardholders.

Pink (priority households) and blue (non-priority subsidy), white (non-priority non-subsidy) ration-card holders receive half a litre of kerosene every three months, while yellow card holders under the Antyodaya Anna Yojana are entitled to one litre every three months. Besides, nearly 1% of families in the State which lack electricity are provided six litres of kerosene.

“The reduced allocation makes it difficult for dealers to ensure supply for all beneficiaries. For instance, a shop serving 800 cardholders may receive enough kerosene for only 400 people. Those who arrive first receive the fuel, while others have to return empty-handed. This has led to arguments with consumers at various places,” he laments.

The recent power cuts have also fuelled the demand for kerosene in Keralam. Despite the State’s near-universal electrification, interruptions in electricity supply have prompted some families, particularly in remote areas, to seek kerosene for lighting and other needs, ration dealers say.

It is estimated that Keralam requires a total allocation of at least 15,792 KL per quarter, comprising 9,600 KL per quarter for the PDS and 6,192 KL per quarter for the fishing sector to meet the current demand for kerosene.

Recently, Food and Civil Supplies Minister Anoop Jacob took the issue up with the Ministry of Consumer Affairs, Food and Public Distribution, but the State has yet to receive a favourable response.

The Centre’s position, he says, is that Keralam’s near-total electrification and high coverage of LPG connections do not justify an increase in the kerosene allocation.

The State has challenged the assessment by highlighting the continued demand in coastal and hilly areas, and among economically weaker sections. The fuel is still used for domestic purposes, including cooking, lighting and starting fires for cooking with firewood, according to the Minister.

He also argues that the Centre’s allocation does not adequately account for the requirements of coastal communities, who have been receiving kerosene under the distribution system for several decades.

However, despite the State’s strong pitch for greater kerosene allocation, officials concede that the demand would likely go ignored, considering the Centre’s broader policy to reduce dependence on fossil fuels and encourage cleaner alternatives. This push has intensified since India co-founded the Global Biofuel Alliance during its G20 presidency in September 2023.

Besides, as many as 21 States and Union Territories have become kerosene-free thus far, with efforts under way to achieve the objective across the country.

For Keralam, however, achieving the kerosene-free status remains a distant and challenging prospect. Despite the State government’s efforts to support the conversion of OBMs to alternative fuels, the scale of the task calls for substantially greater financial assistance with the Centre’s support.

Back at Vizhinjam, the decision to put out to sea still depends on the weather, the expected catch and the risks involved. Increasingly, however, it also depends on whether the boat can be fuelled at a price that leaves enough to sustain the crew.

For traditional fishermen, the transition to cleaner energy cannot be measured solely by the number of engines converted or the quantity of kerosene eliminated. It must also be judged by whether fishing remains a viable livelihood during the transition.

Until affordable alternatives are available at scale, the withdrawal of subsidised supplies risks leaving those who depend on kerosene caught between a shrinking allocation and a market they can scarcely afford.