India Takes Preemptive Measures to Secure LPG Supplies Amid Escalating West Asia Crisis

Union Government Takes Measures to Ensure Uninterrupted LPG Supply

Key Developments:

The Union government has invoked the Essential Commodities Act to ensure an uninterrupted supply of domestic cooking gas, amidst the ongoing West Asia conflict that is straining global fuel supplies.

Supply Prioritization:

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The government has directed refineries and petrochemical units to maximize production of liquefied petroleum gas (LPG) and divert key hydrocarbon streams to the LPG pool. Priority allocation of natural gas has been maintained at 100% of their average consumption over the past six months for the following sectors:

• Domestic piped natural gas (PNG)
• Compressed natural gas (CNG) for transport
• LPG production, including shrinkage requirements
• Pipeline compressor fuel
• Other essential pipeline operational needs

Gas Supply Allocation:

Natural gas supply to fertiliser plants will be maintained at 70% of their average consumption over the past six months, subject to operational availability. Gas marketing entities have been directed to maintain supplies to tea industries, manufacturing units, and other industrial consumers connected to the national gas grid at 80% of their past six-month average consumption.

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City Gas Distribution (CGD) Entities:

CGD entities have been instructed to ensure that industrial and commercial consumers supplied through their networks receive 80% of their average gas consumption over the past six months, subject to operational availability.

Oil Refineries:

To manage the impact of LNG supply disruptions, oil refining companies have been asked to absorb part of the strain by reducing gas allocation to refineries to around 65% of their past six-month consumption, depending on operational feasibility.

Data Disclosure:

The government has directed all producers, importers, transporters, marketers, and distributors of natural gas, including LNG and regasified LNG, to furnish details related to production, imports, stocks, allocation, supply, and consumption to the central government or authorized officials.

LPG Production and Distribution:

The Ministry of Petroleum and Natural Gas has ordered oil refineries to increase LPG production and ensure that the additional output is directed specifically toward domestic consumption. The government has also introduced a 25-day inter-booking period for LPG consumers to manage the supply situation and prevent hoarding or black marketing.