LPG Supply Reform: Following US President Donald Trump’s announcement of a ceasefire, the Central Government has taken a major decision regarding LPG. In response to the growing shortage of LPG across the country, the government has formulated a new policy for gas supply.
The government has provided relief to industries such as pharmaceuticals and steel. New regulations have been established for the bulk supply of LPG to the industrial sector. States have already been allocated 70% of their requirement for packed, non-domestic LPG. Furthermore, states that expand their Piped Natural Gas (PNG) infrastructure will be allocated an additional 10% gas.
LPG Supply Reform: Sectors to Receive Bulk LPG Supply
The government has decided to provide LPG in bulk quantities to industries spanning sectors such as pharmaceuticals, food processing, polymers, agriculture, packaging, paints, uranium and heavy water production, steel, seeds, metallurgy, ceramics, foundries, forging, and glass manufacturing. These industries will receive an LPG allocation equivalent to 70% of their consumption levels recorded prior to March 2026.
Who Gets Priority for LPG Supply?
However, a daily allocation of 0.2 Thousand Metric Tonnes (TMT) of LPG has been earmarked for the entire sector. Priority for LPG supply will be given to factories where natural gas cannot be utilised as a substitute for LPG. Additionally, industries are required to register with Oil Marketing Companies (OMCs) and apply to City Gas Distribution (CGD) companies for a PNG connection. Nevertheless, in instances where LPG is indispensable for production processes and natural gas cannot be used as an alternative fuel, the requirement to apply for a PNG connection will be waived. The Central Government has directed the states to undertake three key measures.
LPG Supply Rules Revised: 3 Directives Issued to States
According to the government, states have been instructed to take the following three essential steps:
1. Disseminate the “Natural Gas and Petroleum Products Distribution Order, 2026” to all relevant government departments.
2. Expeditiously avail themselves of the benefits associated with the 10% “reform-linked” LPG allocation.
3. Promptly notify and implement the state-level policy regarding Compressed Bio-Gas (CBG).
