Centre Restores Commercial LPG for Industries
New Delhi: Immediately after Iran and the US agreed on a two-week conditional ceasefire, the Center on Wednesday requested states to implement this decision, restoring commercial LPG supplies to a broader set of industrial sectors, subject to a defined sectoral limit. In addition, the government increased the allocation of natural gas to urea facilities due to the increase in supply following the interruptions due to the Middle East crisis.
The government’s move comes in the wake of the fact that supply constraints arising from the shortage of liquefied natural gas linked to the Iran war have forced some urea producers to shut down their plants ahead of the monsoon planting season. The government also confirmed that domestic LPG supply remains normal across the country.
In a notification sent to the states, the Ministry of Petroleum and Natural Gas has also directed the states that industries such as polymer, agriculture, packaging, paint, steel, metal and glass will be eligible to receive up to 70 per cent of the bulk non-home LPG consumption before March 2026. “However, the allocation will be limited to the general sector limit of 0.2 TMT per day,” the ministry said.
The Center also stated that priority in allocation should be given to industrial units that need LPG and that it cannot be a substitute for natural gas. The directive specifies compliance for pharmaceutical, food, polymer, agriculture, packaging, paint, uranium, heavy water, steel, seed, metal, ceramics, foundry, forging, glass and aerosol etc. It has further expanded to cover some key sectors such as. “These units will also be entitled to receive up to 70 percent of their pre-March consumption levels within the same general cap,” the ministry said.
When the energy supply from the Gulf countries was interrupted due to the war, India initially cut off the supply of LPG cooking gas to commercial establishments such as hotels and restaurants, but later restored 70 percent of the pre-crisis supply due to resorting to alternative sources to replace the volume lost in the Strait of Hormuz.
Natural gas was initially cut off in industries, including fertilizer plants, to meet the entire demand for CNG used in transportation and piped cooking gas for homes. Supplies to fertilizer units, which are critical for food security, have been partially restored; While operating urea units have received about 75-80 percent of their recent average consumption, the overall allocation to the sector has been increased to about 90 percent from the beginning of April.
Sujata Sharma, joint secretary, ministry of petroleum and natural gas, also told a press briefing: “Keeping in mind the domestic needs, the natural gas supply to fertilizer plants has been increased to around 95 per cent of their requirements after oil companies procured liquefied natural gas from the spot market as part of a broader set of measures taken to manage fuel availability due to disruptions linked to the situation in the Strait of Hormuz.”
Welcoming the government’s decision, the industry said it provides much-needed reassurance to sectors such as pharmaceuticals, steel, food processing, agriculture, where LPG remains a critical production input and where viable substitutes are often limited. “By encouraging greater adoption of PNG while maintaining true industrial LPG requirements, this policy achieves a balanced approach that supports business continuity and strengthens the resilience of India’s manufacturing ecosystem,” CII director general Chandrajit Banerjee said.
