The Ministry of Petroleum and Natural Gas on Thursday, 25 June removed all sectoral restrictions on the supply of non-domestic packed LPG to commercial and industrial consumers, restoring supplies to pre-crisis levels following an improvement in both domestic production and import availability. The easing comes in the wake of the US-Iran peace agreement and the reopening of the Strait of Hormuz, which had been a critical chokepoint during the West Asia crisis.

What Has Been Lifted

The government has fully removed sectoral supply restrictions on non-domestic packed LPG, bringing allocations back to the volumes that prevailed before the West Asia crisis disrupted global energy supply chains. Additionally, bulk LPG supply — which had been suspended entirely at the onset of the crisis — has been partially restored to 50 per cent of pre-crisis consumption levels, according to an official ministry statement.

This provides significant relief to hotels, restaurants, industrial units, and other commercial establishments that had been operating under constrained fuel availability for the duration of the crisis.

C3/C4 Stream Diversion to Be Eased

During the West Asia crisis, the Centre had invoked the Essential Commodities Act to redirect C3-C4 hydrocarbon streams — typically used in petrochemical and downstream industries — exclusively toward LPG production. With supply conditions improving, the government has now decided to reduce this mandatory diversion.

However, the ministry has stipulated that aggregate indigenous LPG production must be maintained at no less than 40,000 metric tonnes per day before enhanced C3/C4 allocations are released to petrochemical and other critical sectors. The Centre of High Technology, operating under the ministry, has been directed to issue organisation-wise allocations and submit regular progress reports.

Domestic Consumers Remained Protected

Throughout the crisis period, the government maintained its stated priority of ensuring uninterrupted LPG access for household consumers. Commercial restrictions were explicitly framed as a protective measure for the domestic segment. Oil marketing companies (OMCs) coordinated supply logistics under challenging global conditions, and the ministry credited their efforts with preventing shortfalls at the retail level.

OMCs have also been directed to maintain comprehensive databases of commercial and industrial LPG consumers, with a unified sectoral database to be established across companies to strengthen monitoring and supply planning.

PNG Transition Push Continues

The government has signalled that the crisis-driven supply management exercise has reinforced its longer-term push toward Piped Natural Gas (PNG) connectivity. Commercial and bulk consumers who shifted to PNG during the crisis will remain on it. Eligible LPG consumers with access to the PNG network — or those in the process of switching — will be progressively transitioned in coordination with City Gas Distribution (CGD) entities.

The Secretary, Ministry of Petroleum and Natural Gas, has written to Chief Secretaries of all states and Union Territories to facilitate smooth implementation of the revised supply arrangements.

What Comes Next

The Centre of High Technology is expected to issue detailed organisation-wise C3/C4 allocations shortly. Industry bodies in the petrochemical sector, which bore the brunt of the mandatory diversion order, are likely to seek clarity on timelines for full restoration. The government's parallel push on PNG expansion suggests that for a segment of commercial consumers, the return to LPG may be transitional rather than permanent.