Centre links additional LPG supply to faster rollout of piped gas networks

The Centre on Wednesday said it would provide up to 10 per cent additional commercial LPG to states that expedite the rollout of piped natural gas (PNG) networks, as the country faces a prolonged supply squeeze triggered by disruptions in West Asia.

The move comes as India’s access to nearly 60 per cent of its LPG imports has been affected by the ongoing conflict, prompting the government to prioritise domestic household consumption and ration supplies to commercial users.

Briefing reporters, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said commercial LPG allocations could be raised to 30 per cent of requirement in states that accelerate city gas distribution (CGD) reforms.

“LPG users should shift to PNG wherever there is a CGD network nearby,” she said, adding that piped gas supply remains unaffected despite the LPG shortage.

Incentives tied to state-level reforms

The Centre has written to states and Union Territories, urging them to ease regulatory hurdles for CGD projects in return for higher LPG allocation.

Oil Secretary Neeraj Mittal, in a communication to states, flagged concerns raised by city gas operators over high charges for right of use and lease rentals, which have slowed investments.

He said reducing such costs would help expand PNG access and reduce dependence on LPG.

Under the proposed framework:

• 1 per cent additional LPG will be allocated to states forming approval panels for CGD applications

• 2 per cent extra for granting deemed approvals to pending and new applications within 24 hours

• 3 per cent more for implementing “dig and restore” policies allowing companies to carry out road restoration

• 4 per cent additional allocation for reducing lease or rental charges to zero

States can qualify for these benefits by demonstrating implementation of the reforms, officials said.

Supply constraints and rationing

Officials said the LPG situation remains “worrisome” due to constrained imports, though there has been no complete shortage anywhere in the country.

Household supply has been prioritised, while commercial users such as hotels and industries initially saw supplies cut off before being restored partially to about 20 per cent of their requirement.

Online bookings have increased to 93 per cent, but queues at distribution centres continue.

Consumers have been advised against panic booking, with the government assuring home delivery of cylinders.

Impact on businesses and services

The supply crunch has affected several sectors dependent on LPG.

Restaurants have curtailed menu items requiring prolonged cooking, while industries such as ceramics, glass and brick manufacturing are facing operational challenges.

Essential services including hospital kitchens, crematories and laundries have also reported disruptions.

Push for alternative fuel

The government is promoting PNG as a cleaner and more reliable alternative to LPG, with city gas companies offering faster connections and incentives.

Despite commitments to provide 12.63 crore PNG connections, only about 1.6 crore have been rolled out so far, highlighting the gap in infrastructure expansion.

To ease the situation, the Centre has also supplied 48,000 kilolitres of additional kerosene to states, with 12 states utilising the quota.

Officials said India remains self-sufficient in petrol and diesel, with no shortages reported, and adequate supplies of aviation turbine fuel (ATF) are also available.