India Raises Commercial LPG Allocation to 70% Amid Crisis

The Government of India has increased the allocation of commercial liquefied petroleum gas (LPG) to 70% of pre-crisis levels, up from 50%. This decision aims to assist sectors such as steel, automobiles, and textiles, which are critical to the economy and rely heavily on LPG for operations. The announcement was made by the Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, via social media on Friday.

In a letter addressed to chief secretaries of all states and Union Territories, Petroleum Secretary Neeraj Mittal outlined that priority would be given to process industries and those needing LPG for specific heating tasks that cannot be replaced by natural gas. This shift comes as industries previously restricted by supply shortages relate to the ongoing conflict in West Asia, which has affected energy supplies.

The government initially curtailed the LPG supply to commercial entities, focusing instead on domestic requirements. This response was due to supply disruptions stemming from the ongoing conflict in West Asia that escalated on February 28. Following Iran’s blockage of the Strait of Hormuz, which channels around 20% of the world's petroleum liquids, the Indian energy market faced challenges. India is a significant importer of crude oil and natural gas, with roughly 88% of crude oil and about 50% of natural gas sourced through this crucial maritime route.

Earlier in March, the government allocated an additional 20% of commercial LPG to states and Union Territories, aimed at supplying critical sectors further. However, the Ministry clarified that states would need to make strides towards expanding piped natural gas networks to qualify for this increase.

In response to the rising concerns about energy security, Minister Hardeep Singh Puri reassured the public that rumours of a lockdown related to ongoing international tensions are unfounded. "There is no such proposal under consideration by the Government of India," he stated, urging citizens to disregard misinformation circulating online. He highlighted India's ongoing efforts to monitor the global energy situation and to ensure availability amid external pressures.

Furthermore, reports from the Ministry of Petroleum and Natural Gas indicated that crude oil supplies are secured for the next two months, and additional LPG supplies have been arranged for approximately one month. A 40% increase in domestic refinery production has reduced dependency on imports significantly, allowing the net daily import requirement to decrease to 30,000 metric tonnes.

With these measures in place, the Indian government is focusing on ensuring that energy supplies remain steady for both industries and households, showcasing resilience during periods of international crisis.