India’s big relief amid LPG crisis fears: Commercial LPG allocation raised to 50% — What it means

The Indian government has increased gas allocation to states and Union Territories to 50 per cent of pre-crisis levels, with an additional 20 per cent supply to be implemented from March 23, according to a communication from the Ministry of Petroleum and Natural Gas. In a letter to all State and UT Chief Secretaries, Petroleum Secretary Dr Neeraj Mittal said that the enhanced allocation aims to support key sectors, particularly those linked to food supply and public welfare. Offering further respite to commercial establishments running short of liquified petroleum gas (LPG) cylinders, the Ministry of Petroleum and Natural Gas (MoPNG) has decided to allocate States an additional 20 per cent of their average monthly requirement of commercial LPG. In simple terms, the government is releasing more cooking gas for businesses (like restaurants and hotels) because the supply shortage is easing up. With more gas available, eateries can operate normally without worrying as much about running out or relying on expensive alternatives. To get this extra gas, businesses are being told they eventually need to switch to piped gas (PNG) instead of relying only on cylinders.

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In a notice on Saturday (March 22), Mittal said, “The supply of LPG continues to be a concern in view of prevailing geopolitical situation. Despite this war situation, Government has given highest priority to Domestic LPG and PNG, along with high priority to hospitals and educational institutions.” The war in West Asia has triggered fears of LPG shortage and disrupted global energy supply chains. “I wish to now inform you that w.e.f 23.3.26 till further notification, another 20% is being allotted to the State, which would take the overall allocation to 50% of the pre-crisis level. The additional allocation of 20% shall be given on priority to the following sectors: restaurants, dhabas, hotels, industrial canteens, food processing/dairy, subsidised canteens/outlets run by state governments or local bodies for food, community kitchens, 5kg FTL for migrant labourers, along with measures to ensure no diversion. The additional quantum is to be allocated on priority basis to restaurants, dhabas, hotels, industrial canteens, food processing units and dairies, subsidised canteens and outlets run privately or by State governments, and community kitchens, as well as 5 kg free trade LPG for migrant labourers,” the notice added. The Ministry also directed placing measures to ensure there are no diversions.

Also Read: 'LPG situation is concerning': Government urges commercial consumers to switch to PNG

Push towards PNG to ease pressure

The Union government has recently begun encouraging a transition to PNG, seeking to alleviate some pressure from LPG supplies mired in the Persian Gulf amidst escalating tensions in West Asia. India imports 60 per cent of its overall LPG requirements, of which 90 per cent is routed through the blockaded Strait of Hormuz. Earlier, on March 18, the government had pledged to allocate an extra 10 per cent of commercial LPG requirements to States and Union Territories provided they help with the transition to PNG. City gas distributors have also offered to incentivise the move by waiving security deposits and registration charges, or even promising ₹500-worth of free gas to consumers. According to government data from Friday, the domestic production of LPG by refineries has risen about 40 per cent compared to their production levels before the crisis, ever since supply maintenance orders mandated that refineries use propane, butene and other relevant streams to produce cooking gas, instead of petrochemicals.

Meanwhile, a total of two Indian-flagged LPG ships have successfully entered India from the conflict zone since the start of the war. These vessels, owned by the Shipping Corporation of India (SCI), were part of a larger group of ships stranded in the Strait of Hormuz after regional tensions escalated on February 28, 2026.