Gas supply curbs lifted: What the Centre's move means for CNG, PNG and LPG consumers

The Centre has withdrawn most of the emergency restrictions imposed on natural gas supplies after liquefied natural gas (LNG) shipments through the Strait of Hormuz resumed following a ceasefire in the West Asia conflict. The move signals an improvement in India's energy supply situation after months of disruption caused by geopolitical tensions.

Emergency provisions rolled back

In a notification issued on Saturday, the Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) Order, 2026. The amendment removes key emergency provisions that had allowed the government to prioritise the allocation of domestically produced natural gas and imported LNG during the supply crisis.

The emergency order had been issued on March 9 under the Essential Commodities Act after disruptions to LNG shipments through the Strait of Hormuz led several suppliers to invoke force majeure and divert cargoes. The disruptions had raised concerns over India's energy security, given the country's heavy dependence on energy imports.

According to the ministry, the situation has now stabilised. It cited the ceasefire in the West Asia conflict, ongoing diplomatic negotiations and the resumption of maritime traffic through the Strait of Hormuz as the reasons for withdrawing the emergency measures.

Why the order was introduced

The rollback marks the end of one of three emergency measures introduced after energy supplies from the Gulf came under pressure following US and Israeli strikes on Iran on February 28 and Tehran's retaliatory attacks.

The government had earlier withdrawn directives asking refiners to maximise LPG production by diverting petrochemical feedstock. It had also removed restrictions on diesel sales to bulk consumers after fuel supply conditions improved.

India imports nearly 88 per cent of its crude oil requirement and about half of its natural gas demand. Around 40-45 per cent of the country's crude oil imports and nearly 65 per cent of LNG imports come from West Asia, making the Strait of Hormuz one of India's most critical energy routes.

Although India diversified its crude oil sourcing during the disruption, LNG imports remained particularly exposed because most cargoes from Qatar pass through the Strait of Hormuz.

What the emergency framework allowed

The March emergency order gave the government powers to reallocate domestic natural gas, LNG and regasified LNG across sectors to ensure uninterrupted supplies to priority consumers.

Under the framework, households using piped natural gas (PNG), compressed natural gas (CNG) for transport, LPG production facilities and gas pipeline operations were guaranteed 100 per cent of their average gas consumption over the previous six months.

Fertiliser plants were assured 70 per cent of their average requirement. Industrial consumers connected to the national gas grid and city gas distribution networks were eligible to receive up to 80 per cent of their average consumption, subject to operational availability.

To maintain these supplies, the government had authorised cuts in gas allocation to petrochemical plants and power stations. Oil refiners were also directed to reduce gas consumption to around 65 per cent of their average usage wherever operationally feasible.

Supply situation normalises

The emergency order had also assigned state-run GAIL, in coordination with the Petroleum Planning and Analysis Cell (PPAC), the responsibility of pooling and redistributing gas supplies, notifying pooled prices for diverted gas and overseeing revised allocation schedules. Gas producers, LNG importers, marketers, pipeline operators and city gas distributors were required to comply with the revised supply mechanism, which temporarily overrode existing commercial agreements.

Announcing the rollback, the ministry said the exceptional measures were no longer required as supply conditions had normalised.

"The ongoing conflict in the Middle East that had resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz has been subject to a ceasefire, and negotiations are ongoing, as part of which, sea traffic through the Strait of Hormuz has been permitted to be resumed," the ministry said in its notification.

Following the improvement in the situation, the government has removed the provisions of the March 9 order that prioritised the allocation of available natural gas supplies.