Centre Eases LPG Supply Curbs for Industries as Situation Improves

The decision comes after a review of the country's LPG availability and reflects the government's effort to balance energy security with the growing needs of industries and commercial establishments.

The Central Government has announced a major relaxation in restrictions on the supply of Non-Domestic Packed Liquefied Petroleum Gas (LPG), bringing significant relief to industrial and commercial consumers across the country. With the domestic and imported LPG supply situation showing signs of improvement, the government has removed all sector-specific restrictions on the supply of commercial packed LPG and restored availability to levels that existed before the disruptions caused by the West Asia crisis.

The government has also partially restored the supply of bulk LPG, which had been suspended when global supply chains came under pressure. Commercial and industrial consumers will now receive bulk LPG supplies amounting to 50 per cent of their pre-crisis consumption levels, helping businesses that rely on LPG for manufacturing, processing and commercial operations.

The decision comes after a review of the country's LPG availability and reflects the government's effort to balance energy security with the growing needs of industries and commercial establishments.

Improved supply allows relaxation of emergency measures

During the West Asia crisis, the government introduced a series of temporary measures to safeguard the supply of LPG for domestic households. One of the key decisions taken under the Essential Commodities Act required C3 and C4 hydrocarbon streams to be used exclusively for LPG production instead of being supplied to petrochemical and other downstream industries.

The emergency policy was intended to increase indigenous LPG production at a time when international supply disruptions created uncertainty in global energy markets. Oil Marketing Companies (OMCs) also implemented temporary restrictions on commercial LPG supplies to ensure uninterrupted availability for domestic consumers throughout the country.

With indigenous production improving and additional imported LPG cargoes expected to arrive, the government has now decided to reduce the diversion of C3 and C4 streams into the domestic LPG pool. This will allow larger quantities of these raw materials to once again become available for petrochemical production and other industrial applications.

Officials have clarified that the revised allocation will not affect household LPG supplies. Indigenous LPG production will continue to be maintained at not less than 40 thousand metric tonnes (TMT) per day, ensuring that domestic consumers continue to receive uninterrupted supplies while industries regain access to critical feedstock.

Petrochemical sector to receive higher C3-C4 allocations

As part of the revised policy, the Centre for High Technology (CHT) under the Ministry of Petroleum and Natural Gas has been instructed to prepare organisation-wise allocations of the additional C3 and C4 streams for petrochemical companies and other priority sectors.

The Centre for High Technology will also submit regular monitoring reports to the Ministry to ensure that allocations remain balanced and that domestic LPG production targets continue to be met.

The restoration of C3 and C4 supplies is expected to support industries that depend on these materials for manufacturing chemicals, plastics and other value-added products. During the emergency period, many of these sectors experienced reduced feedstock availability because production was diverted towards meeting household cooking fuel requirements.

The government believes the revised allocation strikes a balance between supporting industrial growth and maintaining energy security by ensuring sufficient LPG availability for domestic consumption.

Focus remains on cleaner fuels and better supply management

While commercial LPG restrictions have been eased, the government has reiterated its commitment to expanding the use of Piped Natural Gas (PNG) as a cleaner and more efficient fuel for commercial and industrial consumers.

Businesses that have already shifted to PNG will continue using the pipeline-based fuel supply. Other eligible LPG users who have access to city gas networks, or are in the process of switching to PNG, will gradually be transitioned in coordination with City Gas Distribution (CGD) companies.

Officials believe expanding PNG connectivity will reduce long-term dependence on LPG for commercial applications while improving energy efficiency and reducing emissions.

To strengthen planning and improve supply management, the government has directed Oil Marketing Companies to continue maintaining detailed records of commercial and industrial LPG consumers. A unified database covering all OMCs will also be developed to improve coordination, monitoring and future allocation decisions across the sector.

The Secretary of the Ministry of Petroleum and Natural Gas has written to the Chief Secretaries of all States and Union Territories, requesting their cooperation in ensuring the smooth implementation of the revised supply arrangements.

The government said the latest decisions reflect a balanced approach to managing India's energy requirements during changing global conditions. By restoring commercial LPG supplies, increasing feedstock availability for industry and continuing the transition towards cleaner fuels such as PNG, the Centre aims to strengthen national energy security while supporting economic activity and ensuring reliable fuel availability for consumers across the country.