Commercial LPG cylinders | Photo Credit: SHASHI SHEKHAR KASHYAP

In a clear sign that fuel supplies have normalised following the US-Iran crisis, the Indian government on Thursday removed all restrictions on supply of liquefied petroleum gas (LPG) to the commercial and industrial sectors.

“It has now been decided to remove all sectoral restrictions on supply of non-domestic packed LPG and restore it to pre-crisis levels. Further, restriction on supply of bulk LPG also stands relaxed by 50 per cent of the pre-crisis consumption levels,” Oil Secretary Neeral Mittal said in a letter to States.

After the government order, LPG supply will be 100 per cent to hotels, restaurants, small commercial establishments, etc. However, large-scale industries that procure LPG in bulk will only receive 50 per cent of their average supply.

It was further clarified that all commercial/ industrial consumers data must continue to be captured by the PSU oil marketing companies (OMCs) in their databases, and a unified database may be maintained by sector across the three OMCs, he added.

In a separate statement, the Oil Ministry said: “Taking note of the improved indigenous LPG production and the projected availability of imported LPG cargoes, the government has also decided to reduce the diversion of C3/ C4 streams to LPG pool.”

The enhanced allocation of C3-C4 streams for non-LPG uses will be implemented while ensuring that the domestic LPG availability remains unaffected and aggregate indigenous LPG production is maintained at not less than 40,000 tonnes per day, it added.

The Centre of High Technology (CHT) under the Oil Ministry has been directed to issue organisation-wise allocation of this enhanced C3/ C4 stream for the petrochemical and other critical sectors and submit regular reports to the Ministry.

War impact

LPG has been India’s main concern during the latest conflict in West Asia, which began on February 28, 2026. Closure of the Strait of Hormuz (SoH) severely impacted LPG consumption as around half of India’s requirement transits the world’s most critical energy choke point.

The disruption in cargoes from West Asia forced the government to curtail 30 per cent of LPG supply to the commercial sector, which also impacted distribution of 5 KG FTL cylinders — the main cooking medium for migrant labourers.

Mittal also emphasised on the States to continue the process of migrating LPG consumers to piped natural gas (PNG).

”Such commercial/ bulk customers who have shifted to PNG shall remain on PNG. If other LPG customers can access PNG and can shift to PNG or are in process of shifting to the local PNG network, they shall permanently be transitioned to PNG. OMCs shall ensure that this transition to PNG continues to happen in conjunction with CGD entities,” the Secretary added.

Published on June 25, 2026