The Centre has instructed state governments to allocate a greater share of liquefied petroleum gas (LPG) to key industrial sectors as disruptions in global energy supply chains intensify amid the ongoing conflict involving Iran. The Ministry of Petroleum and Natural Gas issued new directives urging states to prioritise commercial LPG allocations, especially for units relying on the fuel for processes that cannot be easily substituted by alternatives such as natural gas.

In a communication to chief secretaries, the central government outlined that bulk LPG supplies will be moved under a sectoral cap of 0.2 TMT per day, with priority given to industries such as steel, automobile manufacturing and other labour‑intensive sectors that depend on LPG for specialised heating and production purposes. Officials also called on states to quickly implement the 10 per cent reform‑linked LPG allocation where it has not yet been adopted.

The move comes as India grapples with geopolitical volatility in the Strait of Hormuz and broader West Asia region, which has strained international oil and gas shipments and heightened concerns over domestic LPG availability. Earlier policy changes raised the commercial LPG supply to 70 per cent of pre‑crisis levels, up from 50 per cent, to help stabilise access for industrial and commercial users amid the energy market turbulence.

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Beyond industrial allocations, the government has taken additional steps to ensure cooking fuel accessibility for households, including doubling the allocation of 5 kg LPG cylinders for migrant workers across states. This initiative aims to reduce hardship among vulnerable groups affected by the supply crunch and to maintain fuel availability at the grassroots level.

Energy analysts say these measures reflect a broader strategy by New Delhi to manage LPG distribution effectively while balancing competing demands from industrial, commercial and domestic sectors. The crisis has also prompted calls for expanded piped natural gas (PNG) adoption to reduce dependence on bottled LPG and reinforce energy security.

Despite concerns over supply, the government has maintained that domestic LPG distribution infrastructure remains functional, even as it works to mitigate the impact of international disruptions. These policy adjustments underscore the central government’s efforts to protect India’s industrial output and ensure continued access to essential fuels as global energy dynamics remain unsettled.

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