Relief for industries as govt allows limited bulk LPG supply, caps allocation at 70%

The government has allowed several industrial sectors to receive limited supplies of bulk non-domestic LPG, partially easing curbs imposed last month amid disruptions in LNG shipments due to the West Asia conflict.

In a letter dated April 8, Petroleum Secretary Neeraj Mittal said industries such as pharmaceuticals, food processing, polymers, agriculture, packaging, paints, steel, ceramics, foundry, glass and aerosols, among others, will be eligible to receive up to 70% of their pre-March 2026 bulk LPG consumption levels.

The allocation, however, will be subject to an overall sectoral cap of 0.2 thousand metric tonnes per day, according to the letter issued by the Ministry of Petroleum and Natural Gas.

Priority in allocation will be given to units where LPG is required for specialised applications that cannot be substituted by natural gas, the official said.

The ministry also stipulated that industries must comply with earlier conditions, including registration with oil marketing companies and applying for piped natural gas (PNG) connections with city gas distribution entities to avail supplies.

However, units where LPG is an integral input in the manufacturing process or is used for specialised purposes that cannot be replaced by natural gas will be exempted from the requirement of applying for PNG connections.

The move comes shortly after the announcement of a ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, one of the world's most critical oil and gas chokepoints.

Last month, the government had prioritised the use of natural gas for household PNG connections, CNG for transport, and LPG production, following supply disruptions triggered by the West Asia conflict.