Hyderabad: The Centre has proposed increasing commercial LPG allocation to 70% of pre-crisis levels by introducing an additional 20% quota for industries, according to an official communication from the Ministry of Petroleum and Natural Gas. The proposal aims to ease pressure on industrial operations amid ongoing energy concerns.
In a letter dated March 27, 2026, Petroleum Secretary Dr Neeraj Mittal informed states that the additional allocation would build on the existing 50% supply level. He noted that states had already received a 40% base allocation and an additional 10% linked to reform measures promoting PNG adoption. Therefore, the revised commercial LPG allocation would significantly enhance supply availability.
The communication said several states had implemented required reforms and benefited from the earlier incentive-based allocation. It added that the new proposal would further support industries dependent on LPG for operations.
Commercial LPG allocation prioritises key industries
The letter stated that the additional commercial LPG allocation would prioritise sectors such as steel, automobile, textile, dye, chemicals, and plastics. These industries were identified as labour-intensive and critical to economic activity.
It also clarified that process industries requiring LPG for specialised heating, where natural gas cannot substitute, would receive priority. As a result, essential sectors would continue operations without disruption.
Further, the ministry said entities seeking allocation must comply with earlier conditions. These include registration with oil marketing companies and application processes linked to PNG usage. However, exemptions would apply to industries where LPG use is unavoidable.
Commercial LPG allocation linked to reform compliance
The Centre urged states to immediately utilise the remaining 10% reform-based quota if not already availed. It also asked authorities to circulate the Natural Gas and Petroleum Products Distribution Order 2026 to all departments.
Officials said the revised commercial LPG allocation would provide relief to industrial units facing supply constraints. Moreover, it would help stabilise production cycles and reduce operational uncertainty.
The ministry indicated that the move forms part of broader efforts to manage energy distribution efficiently during ongoing global uncertainties. It added that coordinated action between states and central agencies remains essential to ensure uninterrupted supply.