Facing tightening natural gas supplies after disruptions to liquefied natural gas (LNG) shipments through the Strait of Hormuz, the Centre has invoked emergency powers under the Essential Commodities Act to divert gas to “priority sectors”, placing household cooking gas and transport fuel at the top of the allocation ladder.
Under a gazette notification issued by the Ministry of Petroleum and Natural Gas (MoPNG) under the Essential Commodities Act, supplies will be prioritised for domestic piped natural gas (PNG), compressed natural gas (CNG) for vehicles and LPG production, with these segments receiving full allocation based on their average consumption over the past six months.
“The Central Government has assessed that the ongoing conflict in the Middle East has resulted in the disruption of LNG shipments through the Strait of Hormuz and suppliers have invoked force majeure clause,” the notification said, adding that this necessitated diversion of gas to priority sectors.
Under the Natural Gas (Supply Regulation) Order, 2026, PNG households, CNG transport and LPG production will receive 100% of their average gas consumption during the past six months, subject to operational availability.
Sectoral curbs
Other sectors will face curbs. Fertiliser plants will receive 70% of their past six-month average consumption, while industries connected through the national gas grid will receive around 80% of their previous allocation. “The supply of natural gas to the fertilizer plants shall ensure seventy per cent of their past six month average gas consumption, subject to operational availability,” the order said, adding that fertiliser units cannot divert the gas for any other use.
City gas distribution companies supplying industrial and commercial consumers have also been directed to limit supplies to 80% of their past six-month average demand.
To meet priority demand, supplies will be diverted by curtailing gas allocation to petrochemical units and power plants, including major consumers such as ONGC Petro additions Ltd, GAIL’s Pata petrochemical complex and Reliance O2C, the notification said.
Refineries to absorb part of the disruption
Refineries will also absorb part of the disruption, with oil refining companies asked to reduce gas allocation to around 65% of their average consumption during the past six months, wherever operationally feasible.
The move comes as the conflict in West Asia disrupts energy shipments through the Strait of Hormuz, one of the world’s most critical maritime corridors that carries a significant share of global oil and LNG trade.
India consumes about 190–195 million standard cubic metres per day (mmscmd) of natural gas, nearly half of which is met through imports, leaving the country exposed to global supply disruptions.
According to sources, Indian oil and gas companies are scouting for LNG cargoes in the spot market to bridge supply gaps, while shipments from alternative source markets continue to arrive.
The notification also states that the revised allocation framework will override existing gas sale agreements and commercial arrangements, enabling the government to regulate sector-wise gas allocation during the crisis.
State-run gas utility GAIL, in coordination with the Petroleum Planning and Analysis Cell (PPAC), will manage supply diversion and implement the revised allocation mechanism across producers, LNG terminal operators, pipeline operators and city gas distribution companies.
Officials said the measures are aimed at shielding households and transport sectors from supply shocks as geopolitical tensions tighten LNG availability in global energy markets.