<PAGE>
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549


                                 FORM 10-K/A-1

                                   (Mark One)

           [X]  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the Fiscal year ended September 30, 1996
                                            ------------------
                                       OR
           [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

             For the transition period from _________ to _________

                       Commission File Number:   33-98490
                                                ---------
                            STAR GAS PARTNERS, L.P.
                            ------------------------

             (Exact name of registrant as specified in its charter)



Delaware                                                 06-1437793
--------------------------------                         -----------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

2187 Atlantic Street, Stamford, Connecticut                        06902
--------------------------------------------------------------------------------
(Address of principal executive office)                          (Zip Code)

(203) 328-7300
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)


       Securities registered pursuant to Section 12(b) of the Act:  None
          Securities registered pursuant to Section 12(g) of the Act:

                                 Common Units
                 --------------------------------------------
                               (Title of class)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                Yes   X      No
                                     ---         ---

Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated be reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ X ]

The aggregate market value of Star Gas Partners, L.P. Common Units held by non-
affiliates of Star Gas Partners, L.P. on November 13, 1996 was approximately
$64,328,000.  At November 13, 1996 there were outstanding 2,875,000 Common Units
and 2,396,078 Subordinated Units, each representing limited partner interests.


Documents Incorporated by Reference:  None
<PAGE>
 
     ITEM 6. SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

  The following table sets forth selected historical and pro forma and other
data of the Partnership and the Star Gas Group and should be read in conjunction
with the more detailed financial statements included elsewhere in this report.
See Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

  The Selected Pro Forma Financial Data is derived from the pro forma financial
information of the Partnership and should be read in conjunction therewith.  See
Item 14, Note 14 - of Notes to Consolidated Financial Statements.

<TABLE>    
<CAPTION>
 
                                                 Partnership/Star Gas Group--Historical                 Partnership
                                       -----------------------------------------------------------      ProForma(b)
                                                         Year Ended September 30,                       Year Ended
                                       -----------------------------------------------------------     September 30,
                                          1992        1993           1994       1995       1996(a)         1996
                                       ---------- -----------      --------   --------   ---------     -------------
                                                     (In thousands, except per Unit data)              (unaudited)
<S>                                    <C>          <C>             <C>        <C>        <C>          <C> 
Statement of Operations Data:
 Sales...............................  $124,113     $143,216        $128,040   $104,550   $119,634     $119,634
 Gross profit........................    65,902       69,861          69,487     54,890     61,077       61,077
 Depreciation and amortization.......    13,750       16,703          13,039     10,073      9,808        9,870
 Operating income (loss).............     7,474      (30,313)(d)       9,393      2,555      9,802        9,866
 Interest expense (net)..............    16,043       16,479          10,497      8,549      7,124        6,713
 Net income (loss)(c)................    (7,282)     (47,049)(d)      (1,404)    (6,169)     2,593        3,128
 Net income per Unit(e)..............         -            -               -          -   $    .11(g)  $    .58
 Cash distribution declared per
  unit...............................         -            -               -          -   $   1.17(g)  

Balance Sheet Data (end of period):
 Current assets......................   $23,284     $ 20,637        $ 17,374   $ 14,266   $ 17,842     $ 17,842
 Total assets........................   195,480      157,847         147,608    155,393    156,913      156,913
 Long-term debt......................   123,488      123,992          70,163      1,389     85,000       85,000
 Due to Petro........................         -        4,723           8,809     86,002          -            -
 Predecessor's equity
(deficiency)/Partners' Capital.......    42,804       (2,825)         44,328     44,305     61,398       61,398
Other Data:
 EBITDA(c)(f)........................   $20,991     $ 19,652        $ 21,946   $ 13,541   $ 19,870     $ 19,996
 
 Retail propane gallons sold.........    92,289      114,405         110,069     89,133     96,294       96,294
 
----------------------
</TABLE>     

(a) Reflects the results of operations of the Predecessor company for the period
    October 1, 1995 through December 20, 1995 and the results of Star Gas
    Partners, L.P. from December 20, 1995 through September 30, 1996.  The
    operating results for the year September 30, 1996 were combined to
    facilitate an analysis of the fundamental operating data.  For the actual
    results of the Partnership from December 20, 1995 through  September 30,
    1996, see Item 14, Page F-4.

(b) For a description of the assumptions used in preparing the Summary Selected
    Pro Forma Financial and Operating Data, see Item 14, Note 14 - of Notes to
    Consolidated Financial Statements.

(c) The decline in operating income, net income and EBITDA during the fiscal
    year 1995 was primarily due to the significantly warmer than normal weather
    conditions during the 1995 heating season. See Item 7 - Management's
    Discussion and Analysis of Financial Condition and Results of Operations.

(d) Includes a loss of approximately $33.0 million in respect of a charge for
    the impairment of long-lived assets.

(e) Net income per Unit is computed by dividing the limited partners' interest
    in net income by the limited partners' weighted average number of units
    outstanding.

(f) EBITDA is defined as operating income plus depreciation, amortization, less
    net gain (loss) on sale of businesses and other non-cash charges (including
    the impairment of long-lived assets). EBITDA should not be considered as an
    alternative to net income (as an indicator of operating performance) or as
    an alternative to cash flow (as a measure of liquidity or ability to service
    debt obligations), but provides additional information for evaluating the
    Partnership's ability to make the Minimum Quarterly Distribution.
    
(g) Represents net income per unit and cash distributions paid per unit for the
    period December 20, 1995 through September 30, 1996.     

                                       13
<PAGE>
 
                     STAR GAS PARTNERS, L.P. AND SUBSIDIARY

         CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL/PREDECESSOR EQUITY
                                 (in thousands)

                               Partners' Capital
       For the period ended December 20, 1995 through September 30, 1996

<TABLE>    
<CAPTION>
 
                                      Number of Units                                          Total
                                    --------------------                           General   Partners'
                                    Common  Subordinated   Common   Subordinated   Partner    Capital
                                    ------  ------------  --------  -------------  --------  ----------
<S>                                  <C>       <C>         <C>         <C>          <C>       <C> 
Balance as of December 20, 1995       -          -              -         -           -          -

 Contribution of assets, net          -        2,396       $    -      $10,956      $ 225     $11,181
 Issuance of Common Units, net       2,875       -          55,875        -            56      55,931
 Distributions ($1.17 per unit)                             (3,371)     (2,809)      (126)     (6,306)
 Net income                           -          -             317         263         12         592
                                  --------  --------      --------    --------   --------    --------
 
Balance as of September 30, 1996     2,875     2,396       $52,821     $ 8,410      $ 167     $61,398
                                  ========  ========      ========    ========   ========    ========
</TABLE>     

                              Predecessor's Equity
 Years ended September 30, 1994 and 1995 and the period October 1, 1995 through
                               December 20, 1995
<TABLE>
 
                                                                                                                       Total
                             Preferred     8% Cumulative        12.5%      Capital in                Common         Predecessor's
                               Stock        Convertible       Preferred    Excess of                Treasury           Equity
                             Series A     Preferred Stock       Stock      Par Value    Deficit    Stock (Old)      (Deficiency)
                             ---------    ---------------       -----      ---------    -------    -----------      ------------
                                           Old       New
                                           ---       ---
<S>                             <C>        <C>      <C>          <C>        <C>        <C>          <C>               <C> 
Balance as of
   Sept. 30, 1993               $ 41       $ 1      $  -         $ -        $58,472    $(59,151)    $(2,188)          $ (2,825)
Recapitalization                 (41)       (1)      525           -         52,413        -          2,188             55,084
Redemption of
  preferred Stock                 -          -       (56)          -         (5,685)       -            -               (5,741)
Stock dividends
  declared                        -          -        31           -          3,136      (3,931)        -                 (764)
Cash dividends
  preferred stock                 -          -         -           -            -           (22)        -                  (22)
 Net loss                         -          -         -           -            -        (1,404)        -               (1,404)
                            --------  --------  --------    --------       --------    --------    --------           -------- 
Balance as of                
  Sept. 30, 1994                  -          -       500           -        108,336     (64,508)        -               44,328
Conversion of
  preferred stock                 -          -      (266)        319            (53)       -            -                  -
Redemption of 
  preferred stock                 -          -       (49)          -         (5,042)       -            -               (5,091)
Stock dividends
  declared                        -          -         4           -            368        (732)        -                 (360)
Cash dividends
  preferred stock                 -          -         -           -              -      (5,287)        -               (5,287)
Purchase accounting
  adjustment                      -          -         -           -        (51,906)     68,790         -               16,884
 Net loss                         -          -         -           -              -      (6,169)        -               (6,169)
                            --------  --------  --------    --------       --------    --------    --------           --------
 Balance as of
   Sept. 30, 1995                -         -         189         319         51,703      (7,906)        -               44,305
Dividends                                                                               (21,309)                      (21,309)
Additional
 capital                         
 contribution                    -         -           -           -          4,184        -            -                4,184
Net income                       -         -           -           -              -       2,001         -                2,001
Balance as of               --------  --------  --------    --------       --------    --------    --------           --------
 Dec. 20, 1995                $  -       $ -       $ 189       $ 319       $ 55,887    $(27,214)    $   -             $ 29,181
                            ========  ========  ========    ========       ========    ========    ========           ======== 
</TABLE>

See accompanying notes to consolidated financial statements

                                      F-5
<PAGE>
 
12)  Unit Option Plan
    
       On December 20, 1995, the General Partner adopted the 1995 Star Gas
     Corporation Unit Option Plan (the "Unit Option Plan"), which currently
     authorizes the issuance of options (the "Unit Options") and Unit
     Appreciation Rights ("UARS") covering up to 300,000 Subordinated Units to
     certain officers and employees of the General Partner.  A total of 40,000
     options were granted to key executives in December 1995.  The Unit Options
     have the following characteristics:  1) an exercise price of $22 per unit,
     which is an estimate of the fair market value of the Subordinated Units at
     the time of grant, 2) vest over a five year period, 3) are exercisable
     after January 1, 2001, assuming the subordination period has elapsed, and
     4) expire on the tenth anniversary of the date of grant.  Upon conversion
     of the Subordinated Units held by the General Partner and its affiliates,
     the Unit Options granted will convert to Common Unit Options.  No UARS have
     been granted pursuant to the plan.     

                                      F-15
<PAGE>
 
                                   SIGNATURE
                                   ---------



Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf of the undersigned
thereunto duly authorized:



Star Gas Partners, L.P.

By:  Star Gas Corporation
     (General Partner)

<TABLE> 
<CAPTION> 


Signature                            Title                         Date
---------                            -----                         ----
<S>                                  <C>                           <C> 

By: /s/   William G. Powers, Jr.     President                     April 8, 1997
          ----------------------     
          William G. Powers, Jr.     Star Gas Corporation
                                     (Principal Executive Officer)



By: /s/   Richard F. Ambury          Vice President - Finance      April 8, 1997
          ----------------------     Star Gas Corporation     
          Richard F. Ambury          (Principal Financial and Accounting Officer) 
</TABLE>