Prime Minister Narendra Modi on Tuesday met 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.
The Centre earlier on Tuesday invoked the Essential Commodities Act to regulate the availability, supply and equitable distribution of petroleum, petroleum products and natural gas. The decision was taken to address potential shortages caused by developments in West Asia.
The government has directed oil refineries and petrochemical units to increase production of liquefied petroleum gas to the maximum possible level and to redirect key hydrocarbon streams into the LPG pool.
The move empowers authorities to ensure uninterrupted access to critical fuel supplies, prevent hoarding and stabilise distribution amid the ongoing Iran war to protect consumers from potential supply shocks linked to tensions affecting shipments through key routes such as the Strait of Hormuz.
India consumes approximately 31.3 million tonnes of LPG annually.
Under the revised allocation, requirements of these sectors will be fully met first before gas is supplied to other sectors, according a gazette notification. The fertiliser sector has been placed at the second place, with at least 70 per cent of their past six months demand being met.
At No. 3, gas supply to tea industries, manufacturing and other industrial consumers will be maintained at 80 per cent of their past six-month average gas consumption subject to operational availability, it said.
All city gas distribution (CGD) entities shall supplying gas to industrial and commercial consumers have been placed at No. 4 on the priority list.
Domestic gas production, which meets about half of the country's consumption of 191 million standard cubic meters per day, will be diverted to the priority sectors by curtailing supplies to petrochemical plants, power units and high-priced gas consumers.
"The central government has assessed that the ongoing conflict in the Middle East has resulted in the disruption of liquefied natural gas (LNG) shipments through the Strait of Hormuz and suppliers have invoked force majeure clause," the notification said, saying the supply cuts would entail diversion of natural gas to the priority sectors.
The supply of natural gas to "domestic piped natural gas (cooking gas supplied to household through pipes) supply; Compressed Natural Gas (CNG) for transport, and LPG production including LPG shrinkage requirements" shall be treated as priority allocation and would be supplied 100 per cent of their average past six month gas consumption, it said.
Pipeline compressor fuel and other essential pipeline operational requirements too have been put in this priority as without gas the pipelines cannot function.
All CGD entities shall ensure that industrial and commercial consumers supplied through their networks receive 80 per cent of their past six month average gas consumption subject to operational availability.
State-owned gas utility GAIL has been tasked to manage the supplies of natural gas to implement priority order.
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