Govt tightens LPG norms for industries, links allocation to PNG adoption

Govt tightens LPG norms for industries: To streamline liquefied petroleum gas (LPG) distribution and encourage the wider adoption of pipelined natural gas (PNG), the government has taken significant steps. In a letter issued by the Ministry of Petroleum and Natural Gas on April 8, the government informed that it has revised the allocation of packed non-domestic Liquefied Petroleum Gas (LPG) for various industrial sectors.

"States have been allotted 70% LPG, which includes an additional allocation of up to 10% linked to the achievement of specified reforms for promotion of PNG," the official release said.

The ministry conveyed that industries like pharma, food, polymer, agriculture, packaging, paint, uranium, heavy water, steel, seed, metal, ceramic, foundry, forging, glass, aerosol and other "shall also receive 70% of the units' pre-March 2026 Bulk non-domestic LPG consumption level subject to a overall sectoral limit of 0.2 TMT/day."

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Highlighting the importance of PNG, the ministry reiterated that industrial units requiring LPG for specific purposes, which do not have an alternative to natural gas, will continue to receive supplies on a priority basis.

"Inter-se priority shall be accorded to units requiring LPG for specialized purposes which cannot be substituted by Natural Gas," said the official statement.

"Further, conditions stipulated in paragraph (b) of the letter dated 21st March 2026 regarding registration with OMCs, and paragraph (c) regarding application for PNG to CGD entities must also be fulfilled by the respective industries to avail Bulk LPG under this allocation," it added.

"However, if the industries specified in para 2(a) above, where LPG is used as an integral input in the manufacturing process or for specialized purposes that cannot be substituted by Natural Gas, the requirement relating to application for PNG shall stand waived," the letter further added.

The ministry also told states and officials to quickly share these new rules with the concerned industries and make sure LPG quotas are allocated fast. Dr Mittal urged all concerned departments and bodies to communicate the Natural Gas and Petroleum Products Distribution Order of 2026 promptly and to expedite the allocation of the 10% reform-linked LPG quota to facilitate smooth transition and adoption of cleaner energy sources.

"I also urge you to
(a) Communicate the Natural Gas and Petroleum Products Distribution (Pipelines and Other Facilities) Order 2026 to all concerned Departments/bodies, if not done so far.
(b) Avail the 10% reform-linked LPG allocation to do so expeditiously, if not done so far.
(c) Expeditiously notify the CBG States's policy (draft communicated vide D.O. No. 16022/9/2025-GP-I (E-54538) dated 6.4.2026)," she said in the letter.