With the LPG supply squeeze entering its third week due to disruptions from West Asia, the Centre on Wednesday offered states an additional 10 per cent commercial LPG allocation if they fast-track the rollout of piped natural gas (PNG) networks to ease pressure on cooking fuel availability.
As the war in West Asia blocked nearly 60 per cent of India’s LPG imports, the government prioritised domestic household consumption, sharply curtailing supplies to commercial establishments such as hotels before partially restoring them to about one-fifth of their requirement. The Centre has now proposed increasing commercial LPG allocation to 30 per cent for states that accelerate city gas distribution (CGD) infrastructure.
Briefing reporters, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said that while LPG supplies remain constrained, PNG supply to households and industries continues without disruption.
"LPG users should shift to PNG wherever there is a city gas distribution (CGD) network nearby," she said, adding that her ministry has written to states offering 10 per cent additional commercial LPG if they implement key reforms such as granting deemed permissions to pending applications, clearing new applications within 24 hours, reducing lease charges and allowing dig-and-restore schemes.
"Onus is on states and UTs to take this reform forward and expedite approvals," she said.
On the supply situation, Sharma said there has been no complete depletion of LPG stocks anywhere in the country, though challenges persist.
"Situation, however, continues to be worrisome" primarily because imports remain blocked, she said.
Online bookings have risen to 93 per cent, but physical queues at LPG dealerships continue.
"LPG consumers are requested to wait after doing online booking. Cylinders will be delivered to their homes," she said. "There is no need for panic booking or going to LPG distributors."
To ease pressure, the government is actively promoting a shift to PNG, with city gas companies offering incentives and faster connections.
In a parallel move, Oil Secretary Neeraj Mittal has written to states and Union Territories highlighting concerns raised by city gas operators over high right-of-use charges and lease rentals, which he said have "dampened the CGD investment climate".
"It is known that excessive taxes on a fledgling business could have a strangulating effect on other consequential economic activities of that business," he wrote.
Mittal urged states to rationalise levies to boost investment and accelerate the transition to natural gas, noting that only 1.6 crore PNG connections have been issued so far against a committed target of 12.63 crore.
"If this gap can be bridged through ease and cost of doing business reforms, one can easily generate economic activity and earn higher corresponding revenue from a larger pie," he wrote.
He outlined a graded incentive framework under which states can secure higher LPG allocations by implementing reforms. These include forming approval panels for CGD applications (1 per cent additional LPG), granting deemed permissions to pending and new applications within 24 hours (2 per cent), introducing a dig-and-restore policy (3 per cent), and eliminating annual lease charges (4 per cent).
States will need to provide evidence of implementing these measures to qualify for the additional allocation, he added.
With shipments from key suppliers such as Saudi Arabia and the United Arab Emirates affected, India has resorted to rationing LPG supplies. Allocation to commercial users and industries has been curtailed to prioritise households and avoid immediate shortages.
The disruption is already impacting multiple sectors dependent on LPG. Restaurants have begun dropping slow-cooked dishes, while industries such as brick and tile manufacturing, ceramics, and glass kilns are struggling to sustain operations. Essential services, including crematories, laundries, and hospital kitchens, are also facing difficulties, alongside bakeries, street-food vendors, and community kitchens that have curtailed output.
Sharma said commercial LPG stocks have been distributed to states, which have been asked to prioritise usage. So far, 15 states and Union Territories have issued distribution guidelines.
She added that 48,000 kilolitres of additional kerosene has been allocated to states to meet cooking and related needs, with 12 states already utilising the quota.
India remains self-sufficient in petrol and diesel, with no fuel shortages reported at retail outlets, she said, adding that supplies of jet fuel (ATF) are also adequate.