Government Lifts Curbs on Commercial LPG as Supply Improves

New Delhi (IANS): In a major relief to industrial and commercial LPG consumers, the government on Thursday removed all sectoral restrictions on the supply of non-domestic packed LPG. The decision restores supplies to the levels prevailing before the West Asia crisis.

A statement from the Ministry of Petroleum and Natural Gas noted that improved indigenous LPG production and the projected availability of imported LPG cargoes prompted the move. This follows the recent US-Iran peace agreement and the opening of the Strait of Hormuz.

The government has relaxed the suspension on bulk LPG supplies—which it froze at the onset of the crisis—allowing consumers to draw 50 percent of their pre-crisis consumption levels. The Ministry attributed this restoration to recent improvements in the overall LPG supply situation.

During the West Asia crisis, the government sought to boost domestic LPG production by issuing orders under the Essential Commodities Act. Those orders forced companies to divert C3-C4 streams exclusively into LPG production, away from petrochemical and other downstream uses.

The government has now decided to reduce this diversion of C3/C4 streams to the LPG pool.

However, the Ministry clarified that it will implement the enhanced allocation of C3-C4 streams for non-LPG uses only while protecting domestic LPG availability. The government will ensure aggregate indigenous LPG production does not fall below 40,000 metric tonnes per day.

The Ministry has directed the Centre of High Technology to issue organisation-wise allocations of these enhanced C3/C4 streams for the petrochemical and other critical sectors, and to submit regular reports back to the ministry.

Since global supply disruptions broke out during the West Asia crisis, the government has prioritized uninterrupted LPG availability for domestic households across the country. To achieve this, it had imposed temporary restrictions on the supply of commercial packed LPG. The statement observed that timely policy interventions and coordinated efforts by oil marketing companies (OMCs) successfully maintained stable supplies despite challenging global supply chains.

The government has now ordered OMCs to maintain comprehensive data on commercial and industrial LPG consumers to facilitate efficient planning and supply management. The OMCs will also maintain a unified sectoral database to strengthen monitoring and operational coordination.

At the same time, the government is pushing ahead with its commitment to expand PNG connectivity. Commercial and bulk consumers who have already shifted to Piped Natural Gas (PNG) will remain on it. In coordination with City Gas Distribution (CGD) entities, the government will progressively transition other eligible LPG consumers who either have access to the PNG network or are currently shifting to it.

To ensure smooth implementation of these revised supply arrangements, the Secretary of the Ministry of Petroleum and Natural Gas has written to the Chief Secretaries of all states and Union Territories.

The Ministry added that the decision reflects the government’s conscious approach toward securing national energy independence while balancing the nation’s energy needs with its ongoing commitment to cleaner, safer, and more efficient fuels.