India restores commercial LPG supplies to pre-crisis levels as crisis pressures ease in West Asia

The government on Thursday restored liquefied petroleum gas (LPG) supplies to commercial users, including hotels, restaurants and other businesses, to pre-crisis levels. It also lifted sector-specific restrictions imposed during the recent conflict in West Asia, signaling an improvement in energy security and stabilizing global market conditions, PTI reported.

In a statement, the Petroleum Ministry said restrictions on commercial LPG supply were lifted following improvement in domestic production and expected arrival of imported LPG cargo.

Bulk LPG supplies, which were halted at the beginning of the crisis, have now been partially restored to 50% of pre-conflict consumption levels.

Read also | US-Iran War LIVE: Israel refuses to leave Lebanon until Hezbollah is demilitarized

The decision is the latest effort by the government to lift emergency measures imposed during the conflict, when concerns over potential supply disruptions in West Asia led authorities to prioritize the availability of cooking gas for households.

The restrictions were imposed after the Iran conflict cut off supplies of LPG from West Asia, which accounts for about 90 percent of India’s cooking gas imports. To ensure household consumption, the government initially stopped the supply of commercial LPG to hotels, restaurants and industrial users and diverted available volumes to domestic consumers.

Supplies were subsequently gradually restored to around 70 percent of normal levels, although several sectors continued to face cuts of up to 50 percent of their usual allocations as authorities sought to conserve fuel stocks amid concerns over import availability, PTI reported.

Refineries were ordered to produce more LPG by diverting flows they would otherwise use for petrochemical production.

“In a major relief to industrial and commercial LPG consumers, the government has removed all sectoral supply restrictions on non-domestic packaged LPG and restored supplies to pre-crisis levels in West Asia,” the statement said.

Read also | The Hormuz toll would “spread like a contagion” to other waterways, Rubio says

Also, “bulk LPG supplies, which were suspended at the start of the crisis, have been released to 50 percent of pre-crisis consumption levels, providing significant relief to commercial and industrial consumers,” he said, adding that the resumption follows a recent improvement in the LPG supply situation.

To boost LPG production during the crisis, the government used powers under the Commodities Act to mandate that C3 and C4 hydrocarbon streams be used exclusively for LPG production, diverting the feedstock from petrochemical and other industrial uses.

The move hit companies like Reliance Industries hard. These refineries had to curtail their lucrative petrochemical production to increase LPG supplies.

With supply conditions improving, the authorities have now decided to limit the diversion of C3-C4 streams to the LPG pool and restore allocations to the petrochemical and other downstream industries, while domestic LPG production will remain above 40,000 tonnes per day.

“In view of the improved domestic production of LPG and the anticipated availability of imported LPG cargo, the government has also decided to limit the diversion of C3/C4 flows to the LPG pool.

“Extended allocation of C3-C4 streams for non-LPG uses will be implemented, ensuring that domestic LPG availability remains intact and total domestic LPG production is maintained at at least 40,000 tonnes per day,” the company said.

The High Technology Center under the Ministry was directed to issue an organizational allocation of these expanded C3/C4 streams for the petrochemical and other critical sectors and submit regular reports to the Ministry.

The decision comes amid broader signs that the conflict-induced energy crisis is easing. Oil prices have fallen back to pre-war levels, government crisis briefings have been suspended and fuel supply concerns have eased as shipping and energy flows have normalised.

The government has said uninterrupted LPG supply to households remains its top priority and has directed state oil marketing companies to maintain comprehensive databases of commercial and industrial consumers to improve supply planning.

At the same time, the authorities reiterated plans to speed up the transition of commercial and industrial consumers to piped natural gas (PNG), with eligible LPG users gradually migrated to municipal gas networks where available.

Read also | 11 India-bound vessels carrying crude oil, LPG cross Strait of Hormuz: Govt

The lifting of emergency restrictions underscores Delhi’s confidence that domestic production and imports are sufficient to meet demand, reducing the need for rationing measures at a time of crisis that has hit industrial and commercial fuel users.

The ministry said since the onset of the global supply disruption stemming from the West Asian crisis, the government has given top priority to ensuring uninterrupted availability of LPG to domestic consumers across the country.

“Accordingly, temporary restrictions on the supply of commercially packaged LPG have been imposed. Early policy interventions and coordinated efforts by oil marketing companies (OMCs) have helped to maintain stable supplies despite challenging global supply chains.”

The government has directed the OMC to continue to maintain comprehensive data on commercial and industrial LPG consumers to facilitate effective supply planning and management. Under open methods of coordination, a single industry database will also be maintained to strengthen monitoring and operational coordination, PTI reported.

“At the same time, the Government remains committed to expanding PNG’s connectivity. Commercial and bulk customers who have already switched to piped natural gas (PNG) will remain on PNG. Other eligible LPG consumers who have access to the PNG network or those in the process of switching to PNG will be gradually transferred to PNG in coordination with the City Natural Gas Distribution (CGD) entities,” the statement said.

In this regard, the Secretary, Ministry of Petroleum and Natural Gas has written to the Chief Secretaries of all the States and Union Territories to ensure smooth implementation of the revised supply arrangements.