India Lifts Emergency Gas Supply Regulations Amid Improved Middle East Situation

Government Eases Natural Gas Supply Regulations

New Delhi: The Indian government has decided to revoke most of the emergency regulations concerning natural gas supply that were enacted during the recent conflict in West Asia. This decision follows the resumption of liquefied natural gas (LNG) shipments through the Strait of Hormuz after a ceasefire was established.

In a notification released on Saturday, the Ministry of Petroleum and Natural Gas revised the Natural Gas (Supply Regulation) Order, 2026, removing significant operational provisions. This change allows all domestically produced natural gas and imported LNG to be sold according to a new priority customer list established by the government.

Initially, the order was implemented on March 9 under the Essential Commodities Act due to disruptions in LNG shipments caused by the conflict in West Asia, which led suppliers to declare force majeure and reroute cargoes to priority clients.

The ministry noted that conditions have improved, with a ceasefire in effect, ongoing negotiations, and maritime traffic through the Strait of Hormuz returning to normal.

The gas supply restrictions were part of three emergency measures introduced by the government after energy supplies from the Gulf were jeopardized by the effective closure of the Strait of Hormuz, following US and Israeli strikes on Iran on February 28 and subsequent retaliatory actions from Tehran.

The other two measures—mandating refiners to maximize LPG production by reallocating feedstock from petrochemicals and limiting diesel sales to bulk consumers—have already been lifted as the supply situation stabilized.

As the world's third-largest oil importer and consumer, India relies on imports for about 88% of its crude oil and nearly half of its natural gas requirements.

Approximately 40-45% of India's crude oil imports and around 65% of its LNG supplies originate from West Asia, highlighting the country's vulnerability to disruptions in the Strait of Hormuz, a crucial route for Gulf energy exports.

The threat to maritime traffic in this region prompted the government to invoke emergency powers in March to protect domestic fuel and gas supplies.

While India has diversified its crude oil sources, its natural gas imports remain vulnerable, as most LNG shipments from Qatar transit through the Strait of Hormuz.

The disruptions led some suppliers to declare force majeure, prompting the government to implement emergency measures to prioritize gas supplies for essential sectors.

The March order granted the government authority to direct the allocation and diversion of domestic gas, LNG, and regasified LNG to ensure uninterrupted supplies to priority consumers after suppliers invoked force majeure clauses amid the West Asia crisis.

Under these emergency measures, supplies to piped natural gas (PNG) households, compressed natural gas (CNG) for transportation, LPG production, and pipeline operations were to be maintained at 100% of their average consumption over the previous six months.

Fertilizer plants were guaranteed 70% of their average gas needs, while industrial consumers connected to the national gas grid and city gas distribution networks were assured 80% of their average consumption, depending on operational availability.

To meet these priorities, the government authorized the reduction of gas supplies to petrochemical plants and power stations, while instructing oil refiners to cut gas consumption to about 65% of their average use, wherever feasible.

The order also mandated state-run GAIL, in collaboration with the Petroleum Planning and Analysis Cell (PPAC), to pool and redistribute gas supplies, establish a pooled price for diverted gas, and oversee the implementation of revised allocation schedules.

Gas producers, LNG importers, marketers, pipeline operators, and city gas distributors were required to adhere to the revised supply schedules, while the emergency provisions took precedence over existing gas sale agreements and other commercial contracts.

The government stated that the emergency measures were no longer necessary as the conflict that had disrupted LNG shipments through the Strait of Hormuz has been followed by a ceasefire, ongoing negotiations, and the resumption of maritime traffic through this strategic waterway.

The notification concluded by indicating that the government is now 'omitting' parts of the March 9 emergency order that prioritized all available gas.