Petroleum Ministry Offers Increased Commercial LPG Supply to States Promoting PNG Connections

Government Increases Allocation of Commercial Cylinders Amid LPG Shortage

March 18, 2023

The Ministry of Petroleum and Natural Gas has issued an order to increase the allocation of commercial cylinders by 10% to states that can help promote the use of piped natural gas (PNG) and facilitate the transition of consumers from cylinders to piped gas. This move aims to increase the use of PNG amid a shortage of liquified petroleum gas (LPG) caused by the Middle East crisis.

The government has proposed a 30% allocation of commercial LPG to states that can help in the long-term transition to PNG. This allocation is an increase from the current 20% allocation. The oil ministry has also proposed additional allocations for various purposes, including the formation of state and empowered district-level committees for the approval of city gas distribution (CGD) applications and the resolution of grievances.

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The government will provide an additional 1% allocation for the formation of state and empowered district-level committees, 2% for the issuance of deemed CGD permissions, and 3% for the introduction of a "Dig and Restore scheme" for CGD entities. Furthermore, an additional 4% allocation will be given to states for reducing the annual rental/lease charges for laying or operating CGD networks to zero.

The country's LPG production has increased by 40% since March 5, when the government issued an order to refiners to maximize their LPG output. However, the LPG supply in the country remains a concern, and consumers are urged to conserve gas usage wherever possible. The government has also assured that the country has enough stocks of aviation turbine fuel, and there has been no price increase by oil marketing companies (OMCs).

Key Figures and Developments

• 10% increase in allocation of commercial cylinders to states that can help promote PNG and facilitate the transition of consumers.
• 30% allocation of commercial LPG to states that can help in the long-term transition to PNG.
• 1%, 2%, 3%, and 4% additional allocations for various purposes, including the formation of state and empowered district-level committees and the introduction of a "Dig and Restore scheme".
• 40% increase in LPG production since March 5.
• No price increase by OMCs.
• Enough stocks of aviation turbine fuel.

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