Amid escalating tensions in the Middle East, the Indian government has unveiled a fresh formula for LPG allocation to bolster vital sectors like pharmaceuticals, food processing, and agriculture. The Ministry of Petroleum and Natural Gas states that the updated policy aims to provide bulk LPG supply to various industries crucial for the nation’s economic stability and supply chains. Industries will now be entitled to receive up to 70% of their pre-March 2026 LPG consumption levels under this new formula.
The revised allocation, however, is capped at 0.2 thousand metric tonnes per day for the entire sector. Notably, priority will be accorded to factories where LPG cannot be substituted by natural gas, ensuring uninterrupted production in such cases. Industries are mandated to register with oil marketing companies and apply for piped natural gas connections through city gas distribution firms, except for units where LPG is indispensable in the manufacturing process.
Moreover, the government has already distributed 70% of packaged non-domestic LPG to states, with an additional 10% allocation for states implementing PNG adoption-related reforms. States are urged to take specific actions, including circulating the Natural Gas and Petroleum Products Distribution Order 2026, promptly utilizing reform-linked LPG allocation benefits, and notifying policies on compressed biogas expeditiously. The Ministry had observed a surge in demand for smaller LPG cylinders, with approximately 7.8 lakh 5-kg free trade LPG cylinders sold nationwide since March 23.
Sales figures peaked at over 1.06 lakh cylinders in a single day recently, a significant increase from the average of around 77,000 daily sales in February.
