Government Revises Gas Distribution, Prioritizes LPG, CNG, and Piped Cooking Gas
Domestic gas supplies redirected to household and transport needs as Middle East conflict disrupts LNG imports
New Delhi, Mar 10: The government has revised the domestic natural gas allocation amid disruptions in imported supplies caused by the ongoing conflict in West Asia. Under the new priority framework, LPG production, piped cooking gas, and Compressed Natural Gas (CNG) for vehicles will receive top priority, ensuring these critical sectors are fully supplied before gas is diverted to other industries, according to a recent gazette notification.
Fertilizer plants have been placed second in priority, with at least 70% of their average gas consumption over the past six months guaranteed. Industrial consumers, including tea manufacturers and other factories, rank third, with gas supplies maintained at 80% of their prior six-month average, subject to operational feasibility. City Gas Distribution (CGD) entities serving industrial and commercial clients are placed fourth on the priority list.
Domestic production, which accounts for roughly half of India’s total daily consumption of 191 million standard cubic meters, will be redirected to priority sectors by cutting supplies to petrochemical plants, power units, and high cost gas consumers. The move comes as LNG shipments through the Strait of Hormuz a key route for about a fifth of global seaborne oil and nearly a third of LNG remain disrupted following US-Israeli strikes in Iran and Tehran’s retaliatory actions, causing increased insurance premiums and market volatility.
“Due to force majeure invoked by suppliers on LNG shipments, the Central Government has directed diversion of domestic natural gas to priority sectors to maintain essential supply and equitable distribution,” the notification stated.
Under the revised order, domestic piped gas for households, CNG for transport, and LPG production—including shrinkage requirements—will receive 100% of their past six-month average consumption. Pipeline operations and compressor fuel needs are also included in the priority allocation to ensure uninterrupted functioning.
Gas supplies to fertilizer units will be strictly used for fertilizer production, while industrial and commercial consumers connected via CGD networks will receive 80% of their historical consumption, depending on operational availability.
Supplies to petrochemical facilities, power plants, and refineries will be curtailed proportionally to accommodate the priority sectors. State-owned GAIL has been tasked with implementing the revised allocation and ensuring smooth management of domestic gas supplies.
This rejig aims to secure household energy needs and maintain fuel for transport, even as international LNG deliveries remain uncertain due to geopolitical tensions in the Middle East.
