MC EXCLUSIVE LPG production increased by 10%, crude oil position is sound and improving, says govt source

LPG production increased by 10%, crude oil position is sound and improving, says govt source

• LPG production increased by 10% to meet domestic demand
• Committee formed to prioritize LPG supply for commercial users
• Essential Commodities Act invoked to protect fuel market

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LPG (Liquefied Petroleum Gas) production in the country has been increased by 10% following directions issued earlier to increase domestic output amid escalating Gulf crisis that has disrupted India's energy supplies, government sources said on March 10.

"LPG disbursement stands at 60 lakhs cylinder per day, unchanged from earlier levels. No LPG distributor is out of supplies. Energy supplies that were disrupted due to closure of Strait of Hormuz has been restored," the source added.

Government has further set a committee wherein OMCs will engage with restaurants, commercial users of LPG and prioritise gas supply as per their needs, the source said.

"It is a supply management issue. Committee will now assess the requirement of LPG by commercial enterprises on a case-to-case basis and re-prioritise gas supply among commercial users," the source added.

"We are getting more cargoes of LPG. LPG and LNG from other countries have started to come. Earlier, there was a shortage of 40 VLGCs (very large gas carriers), almost half of it has started coming," said the government source.

Prime Minister Narendra Modi on Tuesday held a meeting with Petroleum Minister Hardeep Singh Puri and External Affairs Minister S. Jaishankar to review LPG supplies and assess potential disruptions arising from the ongoing Iran war.

In a joint statement on Tuesday, Indian Oil Corporation Limited, Bharat Petroleum Corporation and Hindustan Petroleum Corporation said the Ministry has initiated steps to increase LPG output and secure adequate stocks for household consumers as well as essential non-domestic sectors.

“In light of current geopolitical disruptions to fuel supply and constraints on the supply of LPG, Ministry has taken the step for higher LPG production and securing it for supplying to domestic customers. Along with ensuring supplies to all domestic customers, it has been decided to make supplies as per requirement to the essential non domestic sectors such as hospitals, educational institutions, etc. For LPG supply to other non-domestic sectors, a committee of three Executive Directors of Oil Marketing Companies have been constituted to review the representations and prioritise the LPG supply,” the joint statement said.

The source said the "crude oil position is sound and improving", adding that Indian refiners are now working at a full capacity and their volumes have exceeded the earlier levels prior to the conflict.

"The country has enough supply and will not stop exports (of refined oil products). There is a lot of demand coming in from other countries. Imports from non-Hormuz sources has increased to 70% now, 10 days ago it was 55%. Indian refiners have been operating at full capacity even when oil prices surged past $100 per barrel," the source added.

Govt assures 100% gas supply to domestic PNG, CNG, LPG production

Amid disruptions to liquefied petroleum gas (LPG) supply transiting the Strait of Hormuz --through which the bulk of India’s imports pass -- the government has issued the Natural Gas (Supply Regulation) Order, 2026, invoking the Essential Commodities Act, 1955.

Government sources said that there was a shortage of gas amid Gulf tensions due to which gas supplies had to be balanced among key other sectors.

“We have rationalised gas supplies and given primacy to domestic and other key users,” official sources said, adding that entities like ONGC, OPal, RIL O2C and other consumers using high pressure, high temperature gas have been given the lowest priority in gas allocation.

“These entities will have to depend on APM (administered price mechanism) gas,” sources said.

The Ministry of Petroleum and Natural Gas notified the Natural Gas (Supply Regulation) Order, 2026 on March 9 to secure uninterrupted availability of domestic cooking gas.

According to the order, the central government took the step after assessing that the ongoing conflict in the Middle East that has resulted in the disruption of liquefied natural gas (LNG) shipments and that several suppliers have invoked force majeure clause.

The order states that the supply of natural gas to certain sectors shall be treated as priority allocation and shall be maintained subject to operational availability to hundred per cent of their average past six-month average gas consumption.

These sectors include domestic piped natural gas supply; compressed natural gas for transport; LPG production including LPG shrinkage requirements; pipeline compressor fuel and other essential pipeline operational requirements.

Moneycontrol had earlier reported that the Indian government may re-prioritise gas allocation to different sectors if gas supply tightens amid the escalating Gulf tensions.

The escalating tensions in the Middle East have not only put India’s crude oil supplies at risk but have also pressured the country’s LPG flows, with 80–85% of its LPG needs, with the majority sourced from Gulf suppliers, almost entirely transiting via the Strait of Hormuz.

Government sources have earlier told Moneycontrol that India is securing liquefied petroleum gas (LPG) supplies from the international portfolios of global companies, including UAE’s Adnoc (Abu Dhabi National Oil Company), Sonatrach, Algeria’s state-run oil and gas company, and others amid the war between US, Israel and Iran.