Govt increases commercial LPG allocations to states to 70%:Centre reroutes more gas towards labour-intensive sectors

The Central Government has once again directed states to increase LPG supply amid the ongoing gas crisis in the country. On Friday, March 27, the government increased the allocation or quota of commercial LPG cylinders from 50% to 70%. This decision will benefit most those industries that are completely dependent on LPG. The government has clarified that labour-intensive sectors like steel, automobile, textile, and chemical will be given priority. The LPG supply chain in India was affected due to the ongoing conflict in the Middle East. To deal with this,Neeraj Mittal, Secretary of the Ministry of Petroleum and Natural Gas, wrote letters to the chief secretaries of all states and union territories to inform them about this development. The ministry has issued this order to increase supply for commercial and industrial use. Previously, this quota was only 50%, which is now aimed to be increased to 70% of the pre-crisis level. Following 6 sectors will get priority: According to government orders, LPG will be given first to those industries where the number of labourers is high and which support other essential industries. Adopting PNG will be necessary The government has also put a condition with this increased quota. To take advantage of the additional 20% LPG, commercial and industrial customers will have to register with oil companies (OMCs). They will also need to apply for PNG (Piped Natural Gas) connection with their city’s gas distribution company. The government wants industries to gradually shift from LPG to PNG. Exemption in rules for special heating industries The order also provides an important relief. If a process industry requires special heating that cannot be met with natural gas (PNG), then the PNG application requirement has been removed for them. This means such industries will continue to receive increased LPG quota without any conditions. Government’s advice to states to implement reforms The central government has appealed to all states and union territories to immediately take advantage of the 10% reform-based allocation. So far, 27 states and union territories have issued orders for non-domestic LPG. In states that have not yet done so, government oil companies are directly releasing cylinders. Restaurants dhabas already got relief Earlier on March 21, in the 20% additional allocation given by the government, priority was given to restaurants, dhabas, hotels, industrial canteens and food processing units. Additionally, supply of 5 kg FTL (Free-Trade LPG) cylinders has been ensured for community kitchens and migrant workers. According to government data, more than 37,000 5 kg cylinders have been sold to migrant workers till March 25. What is ‘Pre-Crisis Level’? ‘Pre-Crisis Level’ refers to the time when there was no gas crisis in the country. Currently, states were receiving very low supply, which has now been increased to 70%. Due to the US-Israel and Iran war, crude oil and gas supply from the Middle East has almost stopped. Because of this, initially LPG supply to commercial establishments like hotels was cut to ensure domestic cylinder supply was not affected. Gas shortage due to Iran-America Israel War On February 28, 2026, America and Israel jointly attacked Iran. Both countries conducted large-scale airstrikes on several Iranian military bases, missile sites, and nuclear facilities. Supreme Leader Ali Khamenei and many other high-ranking officials were killed in these attacks. America named this campaign “Operation Epic Fury.” After this war, tensions increased in the Strait of Hormuz and supply was affected. This route is very important for India, as about 80-85% of the country’s LPG comes through here. India is the world’s second-largest LPG importer and imports more than 60% of its gas from outside. This led to a situation of LPG shortage in the country. However, the government asked people not to pay attention to rumors and clarified that there is no shortage of gas and oil in the country.