Centre Asks States To Allocate More LPG To Key Industries Amid Iran Conflict

The central government has asked all states and Union Territories to allocate a larger share of packed non-domestic LPG to key industrial sectors. 

In a letter on Wednesday, Petroleum and Natural Gas Secretary Neeraj Mittal said major industries will now get 70 per cent of their LPG needs based on their pre-March 2026 bulk non-domestic consumption.

The letter comes amid supply disruption due to the Iran conflict. A large percentage of India's LPG imports comes from the Middle East. With Iran blocking the critical Strait of Hormuz and striking other Gulf countries, LPG supply to India has been hit.

This move will help sectors such as pharma, food, polymer and agriculture get more LPG supply. Other units covered include packaging, paint, uranium, heavy water, steel, seed, metal, ceramic, foundry, forging, glass and aerosol. Follow Live Updates

The allocation will be subject to an overall sectoral cap of 0.2 TMT per day for bulk LPG, the letter said. An inter-se priority will be given to units requiring LPG for specialised purposes that cannot be replaced by natural gas.

The Centre also asked states to communicate the new gas and petroleum distribution order to relevant departments. It urged them to issue the 10 per cent reform-linked LPG allocation quickly where it has not been done yet.

The decision comes amid efforts to ensure stable supply of LPG for industries while also managing domestic needs.

Will Ceasefire Ease Supply?

US has reached a "double-sided" ceasefire with Iran. Under the arrangement, US will pause strikes on Iran for two weeks. On the other hand, Iran will let vessels pass through the Strait of Hormuz.

This is particularly significant for an energy-dependent country like India. The pause in hostilities is set to help India secure enough supplies to prevent any shortage-like situation. 

Despite the Iranian blockade, India was among the countries with the highest number of ships passing through the route. At least eight Indian vessels passed through the Hormuz Strait since the conflict started.