The Government of India has proposed a significant increase in the allocation of non-domestic LPG to industries, aiming to provide relief to key sectors impacted by supply constraints.
In a letter dated March 27, 2026, Dr Neeraj Mittal, Secretary at the Ministry of Petroleum and Natural Gas (MoPNG), wrote to all State and Union Territory Chief Secretaries outlining the revised allocation framework.
According to the communication, states had earlier been allotted 40% of their pre-crisis quota of commercial LPG, with an additional 10% linked to reforms promoting PNG adoption. Now, an additional 20% allocation has been proposed, which would take the total allocation to 70% of pre-crisis levels.
The additional allocation will prioritise labour-intensive and core industrial sectors such as steel, automobile, textiles, dyes, chemicals, and plastics. Preference will also be given to industries that rely on LPG for specialised heating processes where substitution with natural gas is not feasible.
The ministry has specified that entities seeking this additional allocation must comply with earlier conditions, including registration with oil marketing companies and applying for PNG connections with city gas distribution entities. However, exemptions may be granted for industries where LPG use is critical and cannot be replaced by natural gas.
The letter also urged states to ensure wider communication of the Natural Gas and Petroleum Products Distribution Order, 2026, and encouraged them to avail the remaining 10% reform-based allocation if not already utilised.
With this move, the government aims to ease pressure on industrial operations and support sectors dependent on LPG, especially amid ongoing supply challenges and elevated energy costs.