The government on Thursday restored non-domestic packed LPG supplies to pre-West Asia crisis levels and resumed bulk LPG supplies at 50% of pre-crisis consumption, marking the rollback of emergency restrictions imposed to safeguard household cooking gas supplies during the recent US-Iran conflict.
“In a major relief to industrial and commercial LPG consumers, Government has removed all sectoral restrictions on the supply of Non-Domestic Packed LPG and restored supplies to the levels prevailing prior to the West Asia crisis,” the petroleum ministry said.
It added that “the supply of bulk LPG, which had been suspended at the onset of the crisis, has been relaxed by 50% of the pre-crisis consumption levels, providing significant relief to commercial and industrial consumers.”
The restoration follows improved domestic LPG production and projected availability of imported cargoes after energy flows began normalising following progress on the US-Iran peace deal.
India depends on West Asia for nearly 90% of its LPG imports. During the crisis, the government had restricted commercial packed LPG supplies, suspended bulk LPG availability and diverted available volumes to domestic consumers to ensure uninterrupted household cooking gas supplies.
Normalising Supply Lines
The restoration follows three months of stress in India’s LPG market. According to PPAC data, LPG consumption declined steadily from 2.38 million tonnes in March to 2.21 million tonnes in April and 2.13 million tonnes in May, the lowest level since the Covid period.
Imports also came under pressure, falling from 1.19 million tonnes in March to 696,000 tonnes in April before recovering to 1.15 million tonnes in May as supplies gradually improved. The recovery in import availability, along with higher domestic production, prompted the government to roll back the emergency restrictions.
To augment domestic LPG production during the crisis, the Centre had invoked the Essential Commodities Act, requiring C3-C4 hydrocarbon streams to be utilised exclusively for LPG production, diverting them from petrochemical and other downstream uses.
“Taking note of the improved indigenous LPG production and the projected availability of imported LPG cargoes, Government has also decided to reduce the diversion of C3/C4 streams to LPG pool,” the ministry said.
It added that the enhanced allocation of C3-C4 streams for non-LPG uses would be implemented while ensuring domestic LPG availability remains unaffected and aggregate indigenous LPG production is maintained at not less than 40 TMT per day.
The centre of high technology has been directed to issue organisation-wise allocations of the enhanced C3-C4 streams for petrochemical and other critical sectors and submit regular reports to the ministry.
Petrochemical Re-allocation
The government said uninterrupted LPG supplies to households would continue to remain its highest priority. Oil marketing companies have been directed to maintain comprehensive databases of commercial and industrial consumers, while eligible commercial and bulk consumers will be progressively transitioned to piped natural gas (PNG) wherever city gas networks are available.
“The government remains committed to expanding PNG connectivity. Commercial and bulk consumers who have already shifted to piped natural gas (PNG) will continue to remain on PNG. Other eligible LPG consumers having access to the PNG network, or those in the process of shifting to PNG, will be progressively transitioned to PNG in coordination with city gas distribution (CGD) entities,” the ministry said.
“The decision reflects the government’s conscious approach towards ensuring national energy security while balancing the energy needs of the nation with its continued commitment to expanding access to cleaner, safer and more efficient fuels,” it added.
In this regard, Neeraj Mittal, Secretary, ministry of petroleum and natural gas, has written to the chief secretaries of all states and union territories for ensuring smooth implementation of the revised supply arrangements.