Daijiworld Media Network - New Delhi

New Delhi, Mar 22: Amid a sharp cut in commercial LPG supplies affecting restaurants and small establishments, the Centre has approved an additional 20 per cent allocation of liquefied petroleum gas to states and union territories to ease the crisis.

The enhanced allocation will benefit restaurants, dhabas, hotels, industrial canteens, food processing units, dairy sectors, government-run subsidised food outlets and community kitchens. It will also cover refills of 5-kg cylinders for migrant labourers, officials said.

The move comes as these sectors were among the worst hit following supply disruptions caused by the ongoing West Asia conflict, particularly due to the closure of the Strait of Hormuz, a key global energy transit route.

With the latest decision, total commercial LPG allocation to states can now go up to 50 per cent of estimated demand. Earlier, the government had permitted 20 per cent allocation, later extending an additional 10 per cent linked to progress in piped natural gas (PNG) infrastructure.

The government has also made it mandatory for commercial and industrial LPG consumers to register with public sector oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. Consumers must also apply for a PNG connection to be eligible for LPG supply.

In a letter to states, Petroleum Secretary Neeraj Mittal said consumers must register their sector of operation and LPG requirements, and take steps towards readiness for PNG connections.

India relies on imports for nearly 60 per cent of its LPG demand, with around 90 per cent of imports routed through the Strait of Hormuz. To manage the crisis, the government had prioritised household LPG supply, cut commercial allocation, and directed refiners to boost domestic production.

Officials said domestic LPG production has increased by around 40 per cent compared to pre-war levels, meeting about 16 per cent of total demand. This improvement has enabled the government to partially restore commercial supplies.

The government also said LPG distribution remains stable, with no reported shortages at over 2,500 distributorships, and a decline in panic bookings by households.

To reduce pressure on LPG, the Centre has urged consumers to shift to PNG wherever feasible. Over 1.25 lakh new natural gas connections have been provided in recent weeks, and more than 5,600 LPG users have already switched to piped gas.

The Petroleum and Natural Gas Regulatory Board has directed city gas distribution companies to accelerate PNG rollout, noting that around 60 lakh households are within immediate reach of piped gas networks.