Government Increases Commercial LPG Allocation By 20 Percent

The Indian government has announced a 20 percent increase in commercial LPG allocations to states and union territories, bringing supply to 70 percent of pre-crisis levels. Priority will be given to industries, including the automobile sector, to ensure production continuity amid ongoing supply constraints.

The move comes as earlier curbs on commercial LPG were introduced to prioritise household consumption, following disruptions linked to the conflict in West Asia and disturbances in the Strait of Hormuz, a key route for global energy shipments.

Industrial Operations Face Supply Challenges

LPG shortages have impacted Tier 3 and Tier 4 component suppliers, forcing some to scale back operations. These constraints threaten the precise production schedules critical to the automotive and other specialised manufacturing sectors.

The additional allocation aims to stabilise industrial activity, ensuring that sectors reliant on LPG for heating and specialised processes can continue operations without interruption.

Priority To Critical Sectors

Petroleum and Natural Gas Secretary Neeraj Mittal noted in a letter to state secretaries that the total commercial LPG allocation will rise to 70 percent of pre-crisis levels.

Priority will be given to industries such as steel, automotive, textiles, dyes, chemicals, and plastics. Within these, the focus is on process-intensive industries requiring LPG for specialised heating that cannot be replaced by natural gas.

Managing Supply Amid Geopolitical Vulnerability

India consumes approximately 31 million metric tonnes of LPG annually, with a substantial portion imported. Nearly 90 percent of these imports pass through the Strait of Hormuz, making the domestic supply chain vulnerable to geopolitical tensions.

To mitigate risks, refiners have been instructed to maximise LPG production and divert feedstock such as propane and butane from petrochemical uses to fuel supply, helping ensure stability across key industrial sectors, including automotive.