The Indian government on Thursday removed all sectoral restrictions on the supply of non-domestic packed liquefied petroleum gas (LPG) and restored supplies to levels prevailing prior to the West Asia crisis, providing major relief to industrial and commercial consumers. Additionally, the supply of bulk LPG, which had been suspended at the onset of the crisis, has been relaxed to 50 percent of pre-crisis consumption levels, according to an official statement.
Background of Restrictions
During the West Asia crisis, the government issued orders under the Essential Commodities Act requiring C3-C4 streams to be utilised exclusively for LPG production, diverting them from petrochemical and other downstream uses to augment domestic LPG output. The restoration follows recent improvement in the LPG supply situation.
Improved Production and Imports
Taking note of improved indigenous LPG production and projected availability of imported LPG cargoes, the government has decided to reduce the diversion of C3/C4 streams to the LPG pool. The enhanced allocation of C3-C4 streams for non-LPG uses will be implemented while ensuring domestic LPG availability remains unaffected and aggregate indigenous LPG production is maintained at not less than 40 thousand metric tonnes (TMT) per day.
The Centre of High Technology under the Ministry of Petroleum and Natural Gas has been directed to issue organisation-wise allocation of these enhanced C3/C4 streams for petrochemical and other critical sectors and submit regular reports to the ministry.
Priority on Domestic Consumers
Since the onset of global supply disruptions from the West Asia crisis, the government accorded highest priority to ensuring uninterrupted LPG availability for domestic consumers. Temporary restrictions were imposed on commercial packed LPG supply. Timely policy interventions and coordinated efforts by oil marketing companies (OMCs) helped maintain stable supplies despite challenging global supply chains.
The government has directed OMCs to continue maintaining comprehensive data on commercial and industrial LPG consumers to facilitate efficient planning and supply management. A unified sectoral database will also be maintained across OMCs to strengthen monitoring and operational coordination.
Expansion of PNG Connectivity
The government remains committed to expanding piped natural gas (PNG) connectivity. Commercial and bulk consumers who have already shifted to PNG will continue to remain on PNG. The Secretary, Ministry of Petroleum and Natural Gas, has written to chief secretaries of all states and union territories to ensure smooth implementation of the revised supply arrangements.
Other eligible LPG consumers having access to the PNG network, or those in the process of shifting to PNG, will be progressively transitioned to PNG in coordination with city gas distribution (CGD) entities. The decision reflects the government's approach towards ensuring national energy security while balancing energy needs with its commitment to expanding access to cleaner, safer, and more efficient fuels.
