The Centre on Saturday allowed an additional 20% allocation of commercial LPG to states and Union territories, taking the total commercial LPG supply to 50% of pre-crisis levels, as it steps up efforts to manage shortages triggered by disruptions in West Asia.
The latest increase—effective March 23—builds on earlier measures, including 20% baseline restoration and 10% additional allocation linked to PNG expansion, as per a communication from the ministry of petroleum and natural gas. “I wish to now inform you that wef 23.3.26 till further notification, another 20% is being allotted… which would take the overall allocation to 50% of the pre-crisis level,” petroleum secretary Neeraj Mittal said in a letter to states and UTs .
The additional supply will be prioritised for key sectors, including restaurants, dhabas, hotels, industrial canteens, food processing and dairy units, subsidised kitchens and community feeding programmes, as well as 5 kg cylinders for migrant labourers.
“The additional allocation of 20% shall be given on priority… along with measures to ensure no diversion,” the letter stated.
Sourcing and Distribution
The move comes amid tightening LPG availability due to geopolitical disruptions affecting energy flows through the Strait of Hormuz, which typically handles around 90% of India’s LPG imports from West Asia. India remains heavily dependent on imported LPG, making supply management critical during the ongoing crisis.
To mitigate risks, India has begun diversifying LPG sourcing, exploring cargoes from the United States, Russia and other regions, even as it continues to stabilise domestic supply.
At the ground level, the government said no dry-outs have been reported at LPG distributorships, and domestic deliveries continue normally, supported by increased refinery production and tighter monitoring mechanisms.
Operational data show that 20 states and Union territories have already issued orders for allocation of non-domestic LPG in line with central guidelines. In the remaining regions, public sector oil marketing companies are supplying commercial LPG cylinders directly.
Over the past week, commercial users have lifted around 13,479 metric tonne of LPG, indicating steady demand from key sectors despite supply constraints. Hospitals and educational institutions are receiving nearly 50% of the allocated commercial LPG, reflecting prioritisation of essential services.
Structural Shift
At the same time, the Centre has tightened eligibility norms to push long-term structural transition away from LPG. “All commercial/industrial LPG consumers shall have to register with OMCs… and apply for PNG… before they can be eligible to be allotted any commercial LPG from the overall 50% allocation,” the communication said .
Oil marketing companies will also record end-use details, sector classification and annual LPG requirements, signalling a shift towards tighter monitoring and targeted distribution.
Enforcement action has also been intensified, with over 3,500 raids conducted and around 1,400 LPG cylinders seized across states to curb hoarding and diversion, the government said in a statement.
In parallel, the government has rolled out alternative fuel support, including 48,000 KL of additional kerosene allocation and increased coal supply, to reduce pressure on LPG demand in non-priority sectors.
With global supply risks persisting, the Centre’s strategy reflects a dual approach — boosting immediate commercial LPG availability while accelerating a shift to PNG — to stabilise supplies and reduce vulnerability to external shocks.