Government withdraws emergency gas supply curbs as LNG supplies resume through Strait of Hormuz | Today’s news

The center repealed most of the provisions of the emergency natural gas supply regulations introduced during the West Asian conflict after the movement of liquefied natural gas (LNG) cargoes through the Strait of Hormuz resumed after the ceasefire.

The Ministry is amending the decree on the regulation of natural gas supplies from March 2026

In a notice issued on Saturday (July 4), the Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) 2026, removing key operational provisions that allowed the government to prioritize the allocation of domestically produced natural gas and imported LNG to essential consumers.

The original order, issued on March 9 under the Essential Commodities Act, was put in place after conflict in West Asia disrupted LNG supplies through the Strait of Hormuz. During the crisis, several suppliers invoked force majeure clauses and diverted cargo, prompting the government to step in and secure supplies for priority sectors.

Ceasefire and Resumption of Hormuz Call to Operation Rules

According to the ministry, the situation has stabilized following the ceasefire, ongoing diplomatic negotiations and the resumption of maritime traffic through the strategically important Strait of Hormuz.

“The ongoing conflict in the Middle East, which has resulted in the disruption of liquefied natural gas supplies through the Strait of Hormuz, has been the subject of a ceasefire and negotiations are underway to allow the resumption of maritime traffic through the Strait of Hormuz,” the announcement said.

How Iran’s February 28 strikes triggered India’s emergency energy measures

The gas cut was one of three emergency measures announced after Gulf energy supplies were put at risk due to the effective closure of the Strait of Hormuz following US and Israeli strikes on Iran on February 28 and Tehran’s retaliation.

The other two emergency measures – requiring refineries to maximize LPG production by diverting feedstock from petrochemical units and curbing diesel sales to bulk customers – have already been withdrawn after fuel supplies returned to normal.

India’s heavy dependence on West Asia for oil and LNG imports

India, the world’s third-largest importer and consumer of crude oil, relies on imports for nearly 88 percent of its oil demand and about half of its natural gas consumption.

About 40-45 percent of India’s oil imports and nearly 65 percent of its LNG supplies come from West Asia, underscoring the country’s dependence on continuous shipping through the Strait of Hormuz, a key transit route for energy exports from the Persian Gulf.

Concerns about disruptions along the waterway prompted the government to use emergency powers in March to protect domestic fuel and gas availability.

Why LNG supplies were more vulnerable than oil

While India has been able to diversify its oil purchases by sourcing supplies from alternative producers, natural gas imports have remained particularly vulnerable as most of Qatar’s LNG cargoes transit through the Strait of Hormuz.

As suppliers invoked force majeure during the outage, the government imposed emergency regulations to ensure uninterrupted gas supplies to critical industries.

Inside the March Emergency Order: Sectoral Gas Allocation Rules

The March order empowered the government to determine the sectoral allocation and diversion of domestic gas, LNG and regasified LNG to maintain supplies to priority consumers affected by the crisis in West Asia.

Under the emergency regime, households with piped natural gas (PNG), compressed natural gas (CNG) used in transport, LPG production facilities and pipeline operations were guaranteed 100 percent of their average gas consumption for the previous six months.

Fertilizer producers were guaranteed 70 percent of their average gas consumption, while industrial consumers connected to the national gas network and municipal gas distribution networks were guaranteed 80 percent of their average consumption, subject to operational availability.

Refineries, petrochemical units and power plants bear the brunt

To meet these commitments, the government authorized gas supply cuts to petrochemical units and power plants, while ordering oil refineries to reduce gas consumption to nearly 65 percent of their average consumption whenever operationally feasible.

Role of GAIL in Pooling and Redistribution of Gas Supply

The order also directed the state-owned GAIL in coordination with the Petroleum Planning and Analysis Cell (PPAC) to pool and redistribute gas supplies, fix a pooled price for diverted gas and implement revised allocation schedules.

Gas producers, LNG importers, traders, pipeline operators and city gas distributors were required to adhere to revised supply arrangements, while emergency provisions temporarily replaced existing gas sales agreements and commercial contracts.

The government says emergency measures are no longer necessary

The government said these emergency measures were no longer necessary as the ceasefire eased tensions, negotiations progressed and shipping through the Strait of Hormuz resumed. As a result, it omitted the provisions of the March 9 emergency regulation that allowed for the priority allocation of all available gas supplies.