The Ministry of Petroleum and Natural Gas has announced a new LPG allocation formula aimed at supporting critical sectors of the economy, including pharma, food, and agriculture.
Priority Supply to Key Sectors
Under the revised policy:
- Bulk LPG will be supplied to sectors such as
- Pharma
- Food processing
- Agriculture
- Steel, ceramics, glass, packaging, and more
These industries will receive:
- Up to 70% of their pre-March 2026 LPG consumption
- Subject to an overall cap of 0.2 TMT (thousand metric tonnes) per day
Preference for Non-Substitutable Usage
The government clarified:
- Industries where LPG cannot be replaced by natural gas will get priority
- This ensures continuity in essential manufacturing processes
Mandatory Registration & PNG Transition
Industries must:
- Register with Oil Marketing Companies (OMCs)
- Apply for Piped Natural Gas connections via city gas distributors
However:
- Units where LPG is technically irreplaceable are exempt from PNG requirements
Incentives for States
States have already received:
- 70% allocation of packed non-domestic LPG
Additionally:
- 10% extra allocation will be given to states implementing PNG-related reforms
Three Key Directives to States
The Centre has asked states to:
- Implement the Natural Gas & Petroleum Products Distribution Order, 2026
- Utilise the reform-linked 10% LPG allocation
- Notify policies related to Compressed Bio Gas (CBG)
Surge in Demand for Small Cylinders
The ministry also reported a sharp rise in demand:
- Over 7.8 lakh 5-kg LPG cylinders sold since March 23
- More than 1.06 lakh cylinders sold in a single day recently
- Around 1,300 awareness camps conducted by oil companies
Aim: Stability Amid Global Challenges
The move comes amid global supply uncertainties and aims to:
- Ensure steady LPG availability
- Support critical industries
- Encourage transition to cleaner fuels like PNG and CBG
