Amid ongoing geopolitical tensions in West Asia that have disrupted global energy markets, the Union government has asked states and Union territories to increase commercial LPG allocation to 70% of pre-crisis levels to support industrial activity across the country.
Petroleum secretary Dr Neeraj Mittal conveyed the decision in a letter to chief secretaries, stating that an additional 20% commercial LPG allocation will be provided on top of the existing 50% supply to help labour-intensive sectors maintain operations during supply disruptions.
Union minister for petroleum and natural gas Hardeep Singh Puri said the additional allocation will prioritise industries such as steel, automobile, textile, dyeing, chemicals and plastics, particularly units that depend on LPG for specialised heating processes that cannot easily shift to piped natural gas.
The move comes as the Centre seeks to stabilise industrial production and reassure citizens that India has sufficient petrol, diesel and LPG supplies despite global uncertainty triggered by the Middle East conflict.
Priority LPG Supply For Labour-Intensive Industrial Sectors
Under the revised distribution plan, the government has instructed states to prioritise industries that generate large-scale employment and play a key role in supply chains. According to officials, the additional LPG supply will mainly benefit steel manufacturing, automobile production, textile processing, dyeing units, chemical industries and plastics manufacturing, many of which rely on LPG for heating and specialised industrial processes.
Union minister Hardeep Singh Puri said the enhanced allocation aims to prevent disruptions to sectors that are vital for economic stability and employment. “The government has decided to increase the commercial LPG allocation of states to 70%, with 20% allocation given to industries such as steel, automobile, textile and other labour-intensive industries,” he said. He added that priority will be given to industries where piped natural gas (PNG) cannot substitute LPG, ensuring that operations dependent on LPG continue without interruption.
To qualify for the additional allocation, industries will typically be required to register with oil marketing companies (OMCs) and apply for PNG connections through city gas distribution (CGD) networks wherever feasible. However, the government has clarified that these requirements could be waived in cases where natural gas cannot replace LPG due to technical or operational limitations.
In the same communication, the Centre also urged state governments to immediately utilise the 10% reform-based LPG allocation, which was introduced earlier as part of distribution reforms. Officials said that when combined with the additional supply, commercial and industrial LPG allocation will reach 70% of the pre-crisis level, offering relief to industrial operations and preventing supply chain disruptions.
Centre Assures Adequate Fuel Supply
The policy decision comes against the backdrop of rising concerns over global energy supplies following the intensifying conflict in West Asia, a region that plays a crucial role in the world’s oil and gas trade. The government has emphasised that India’s fuel supply network remains stable, urging citizens not to panic or engage in hoarding. Officials have also warned against misinformation campaigns that could trigger unnecessary fear among consumers.
According to government estimates, domestic refinery output has been increased significantly to strengthen supply. India’s refineries are now producing around 50 thousand metric tonnes of LPG per day, meeting more than 60% of the country’s estimated daily demand of roughly 80 thousand metric tonnes. This increase has helped reduce the need for imports while maintaining stable distribution across the country.
To further safeguard supplies, India has secured around 800 thousand tonnes of LPG cargoes from countries such as the United States, Russia and Australia, which are currently being delivered through 22 import terminals, compared to just 11 terminals in 2014. Officials say these measures have helped ensure that about one month’s LPG supply is currently secured, while procurement efforts continue to build additional reserves.
Oil marketing companies are currently distributing more than 50 lakh LPG cylinders every day across the country. Although demand briefly surged to around 89 lakh cylinders daily during panic buying, authorities say consumption has now stabilised after the government’s reassurance about adequate supply.
Alongside supply management, the Centre has also taken steps to cushion consumers from rising global oil prices. The government recently reduced central excise duty on petrol and diesel to help moderate fuel prices in the domestic market. The decision, announced by Finance Minister Nirmala Sitharaman, aims to protect consumers and businesses from the economic impact of the global energy crisis.
At the same time, export duties have been imposed on certain fuels, including diesel and aviation turbine fuel, to ensure that domestic supplies remain adequate during the period of global disruption.
The Logical Indian’s Perspective
Energy disruptions triggered by geopolitical conflicts often ripple far beyond the immediate region, affecting industries, livelihoods and everyday life across the world. India’s decision to increase LPG allocation for labour-intensive sectors reflects an attempt to balance two critical priorities: safeguarding household access to cooking fuel while ensuring that factories, workshops and supply chains continue to function.
However, crises like these also highlight deeper structural challenges in global energy dependence. With India importing a large share of its fuel requirements, strengthening energy diversification, domestic production and renewable alternatives will remain essential to building long-term resilience.
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