Government Boosts LPG Cylinder Allocation to Support Industries Amid Shortages

In response to ongoing gas shortages due to the Iran conflict, the Indian government has increased the allocation of commercial LPG cylinders from 50% to 70%. This move aims to support labor-intensive sectors such as steel, automobiles, and textiles. Industries requiring LPG for specialized heating will be prioritized, and businesses must register with oil marketing companies to access the additional allocation. The government also encourages states to utilize a 10% reform-based allocation to further assist industrial operations. Recent data shows significant distribution of LPG cylinders to migrant workers, highlighting the government's commitment to addressing the crisis.

By Narendra Chaudhary Mar 27, 2026, 14:30 IST

Increased LPG Allocation for Commercial Use

The Central government has announced an increase in the allocation of commercial LPG cylinders from 50% to 70% of the total demand. This decision aims to alleviate the impact of gas shortages on industrial and commercial users, which have been exacerbated by disruptions in imports linked to the ongoing conflict in Iran.

The government will prioritize sectors that are labor-intensive, including steel, automobiles, textiles, dyes, chemicals, and plastics, as these industries also support other critical sectors.

Within these categories, special attention will be given to process industries that rely on LPG for specific heating applications that cannot be replaced by natural gas.

The new allocation includes an additional 20% on top of the existing 50%, raising the total commercial LPG allocation to 70% of the pre-crisis levels for non-domestic LPG, as stated in the government order.

To access this extra allocation, all commercial and industrial LPG users must register with oil marketing companies and apply for PNG through their local city gas distribution entities.

The order specifies that industries mentioned earlier, where LPG is essential for processes that cannot be substituted by natural gas, will have their requirements waived.

Additionally, the government has urged states to take advantage of a 10% reform-based allocation if they haven't already. This move will increase the total allocation for commercial and industrial LPG to 70%, providing much-needed relief to industrial operations across the states.

Previously, an additional 20% allocation was announced on March 21, focusing on sectors such as restaurants, dhabas, hotels, industrial canteens, food processing, and community kitchens, along with 5 kg free trade LPG cylinders for migrant workers.

Recent data from the petroleum ministry indicates that over 37,000 five-kilogram FTL cylinders have been distributed to migrant laborers as of March 25.

State governments and district authorities will oversee the distribution of LPG cylinders, determining priority sectors and consumers based on their assessments.

In a related development, Iran has signaled its willingness to permit more Indian vessels carrying LPG to pass through the Strait of Hormuz, following discussions between Indian officials and Iranian authorities.