Petroleum Ministry Secretary Neeraj Mittal wrote to all state and union territory chief secretaries on Friday and noted that several states have already implemented some or all reforms related to non-domestic LPG allocation in various sectors, news agency ANI reported.
On March 16, states were initially allocated 40% of the pre-crisis quota and another 10% was linked to the implementation of certain reforms aimed at promoting the use of Piped Natural Gas (PNG).
The Secretary informed that in addition to the existing allocation of 50% made earlier, an additional 20% is now proposed, bringing the total allocation of commercial LPG to 70% of the pre-crisis level for bottled foreign LPG.
The development comes at a time of heightened geopolitical tensions between the United States and Iran. As a result, Tehran imposed a blockade on the Strait of Hormuz, a critical maritime hub through which a fifth of the world’s oil and gas supplies pass.
This effective closure of the strait has caused instability in global energy markets and raised fears of fuel supply disruptions. According to the news agency, India gets around 12-15% of its oil imports through the Strait of Hormuz.
What industries will be prioritized?
According to Mittal, an additional 20% of commercial LPG should be provided to labour-intensive sectors that play a key role in supporting wider industrial supply chains.
Industries such as steel, automobile, textile, dyes, chemicals and plastics will get priority under the revised allocation framework. Within these sectors, priority will be given to process-based industries or sectors requiring LPG for special heating purposes that cannot be replaced by natural gas.
The Secretary also urged all states to immediately utilize the 10% allocation under the reform if they have not already done so.
The secretary said this will increase the allocation for commercial or industrial LPG to 70% (with 10% under the reform), giving massive relief to industrial operations in the state, ANI reported.
The government has stepped in to protect consumers from soaring fuel prices
Meanwhile, in another move to protect consumers from a spike in petrol and diesel prices due to the Middle East crisis, the government on Friday cut excise duties on petrol and diesel.
According to a gazette notification on Thursday, the additional excise duty on petrol has been reduced to ₹3 per liter from ₹13 earlier. Meanwhile, the excise duty on diesel has been reduced ₹0 from ₹10 per liter earlier. The windfall tax on diesel exports has been pegged at Rs 21.5/litre.
The move to cut excise duty on petrol and diesel is aimed at providing relief to oil companies amid the Middle East war as oil prices continue to trade above $100 a barrel.
The development comes at a time when fears of a possible hike in fuel prices are skyrocketing amid rising tensions in the Middle East over the US-Iran war.
