In the context of vinyl chloride monomer (VCM) production, an oxychlorination catalyst that allows direct VCM formation from gas-derived ethane instead of expensive oil-derived ethene is intensively sought after. A wide range of stable ethane oxychlorination catalysts for this purpose have recently been reported, yet they mainly yield ethene, while VCM remains a minor by-product. Strikingly, the same catalysts are active in ethene oxychlorination, resulting in selective VCM formation under equivalent reaction conditions. This work reveals the origin of these diverging selectivity patterns by combining quantitative catalytic tests, temporal analysis of products (TAP), and density functional theory (DFT) on iron phosphate. Ethane oxychlorination is found to proceed sequentially through ethyl chloride (EtCl) dehydrochlorination to ethene, while ethene oxychlorination directly yields VCM without formation of the intermediate dichloroethane (EDC) on iron phosphate. Furthermore, by co-feeding ethane in ethene oxychlorination, we demonstrate that the alkane suppresses the formation of VCM in ethene oxychlorination. The reason for this VCM inhibition is found in the hydrocarbon competition for a combination of the active, free and chlorinated iron centers. As ethane activation exhibits half of the barrier of ethene activation, the presence of ethane leads to active site depletion, hindering VCM formation. These observations are extended by ethane co-feeding tests in ethene oxychlorination over a wide range of known oxychlorination catalysts (EuOCl, LaOCl, CeO2, and CuCl2-KCl-LaCl3/γ-Al2O3), and corresponding DFT calculations, indicating that the described phenomenon is material independent. The gathered molecular-level understanding explains the major hurdle of using ethane as feedstock for vinyl chloride production.