The government may consider reprioritising natural gas allocation across sectors to safeguard supplies for fertiliser and city gas distribution (CGD) network after LNG supplies from Qatar were disrupted following an attack on the Ras Laffan liquefaction complex, sources said.
The development comes after GAIL and Petronet LNG indicated that supplies from Qatar have come to a halt, prompting both companies to assess the need to curtail gas supply to downstream consumers.
“As supplies from QatarEnergy have halted after its Ras Laffan plant was attacked, the government may look at reprioritising gas allocation for critical consuming sectors, including fertilisers and CGD,” a senior official aware of the development said.
India imports about 45% of its natural gas requirement which is used across fertiliser production, CGD, power generation, refineries and industries such as steel and cement.
India meets half of its 195 million standard cubic metre per day (mmscmd) of gas consumption through imports. An official said around 60 mmscmd is currently not available due to the closure of the Strait of Hormuz and the force majeure declared by Qatar.
Officials said the government’s focus would be to ensure uninterrupted supplies for fertiliser plants and CGD networks, which supply compressed natural gas (CNG) for vehicles and piped natural gas (PNG) for household cooking. If supply constraints persist, industries and gas-based power plants could receive reduced allocations.
Any such move would require discussions between ministries, including petroleum and natural gas, power and fertilisers, a source said.
Another official said farmers and CGD consumers would remain insulated from any curtailment. “There would not be any impact on farmers, and CGD consumers.”
Under the existing policy, fertiliser plants and CGD networks are priority sectors for domestic gas allocation, followed by LPG plants, power plants and industrial users.
Navigating the Gulf Crisis
Separately, India has held talks with the US to seek clarity on a proposed mechanism to provide insurance for vessels carrying energy shipments through the Gulf, as New Delhi looks to shield buyers from supply disruptions.
A government official said India is exploring the option of marine cover for vessels shipping oil and gas from the West Asia, as shipping companies remain cautious about navigating the Strait of Hormuz.
US President Donald Trump has said the US International Development Finance Corporation would provide political risk insurance and financial guarantees for maritime trade in the Gulf, and indicated that the US Navy could escort vessels through the Strait of Hormuz to ensure energy shipments continue through the corridor.