The government on Thursday restored commercial LPG supplies to pre-crisis levels and lifted sector-specific restrictions imposed during the recent West Asia conflict, citing improved domestic production and the expected arrival of imported cargoes.
In a statement, the Petroleum Ministry said supplies of non-domestic packed LPG to hotels, restaurants and other commercial users have been fully normalised. Bulk LPG supplies, which were suspended when the crisis began, have also been partially resumed.
"In a major relief to industrial and commercial LPG consumers, the government has removed all sectoral restrictions on the supply of non-domestic packed LPG and restored supplies to the levels prevailing prior to the West Asia crisis," the statement said.
Also, "the supply of bulk LPG, which had been suspended at the onset of the crisis, has been relaxed by 50 per cent of the pre-crisis consumption levels, providing significant relief to commercial and industrial consumers," it said, adding that the restoration follows the recent improvement in the LPG supply situation.
The restrictions were introduced after disruptions linked to the Iran conflict raised concerns over LPG imports from West Asia, which supplies nearly 90 per cent of India's cooking gas imports.
To protect household consumption, the government had diverted supplies from commercial and industrial users to domestic consumers.
Commercial LPG supplies were later restored in phases, reaching around 70 per cent of normal levels, while several sectors continued to face allocation cuts.
As part of its emergency response, the government had directed refineries to maximise LPG output by diverting C3 and C4 hydrocarbon streams from petrochemical production under powers granted by the Essential Commodities Act.
The move impacted refiners and petrochemical producers, including Reliance Industries, which had to reduce petrochemical output to boost LPG availability.
With supply conditions now improving, the government has decided to ease those measures.
"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 the 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 said.
The Centre for High Technology has been tasked with issuing revised allocations of C3/C4 streams to petrochemical and other downstream industries and monitoring implementation through regular reports.
The rollback comes as signs emerge of a broader easing in energy market pressures. Crude oil prices have retreated to pre-conflict levels, fuel supply concerns have diminished and global shipping and energy flows have stabilised.
The ministry reiterated that uninterrupted household LPG supply remains its highest priority and directed oil marketing companies (OMCs) to maintain detailed databases of commercial and industrial consumers to improve supply planning and monitoring.
"The timely policy interventions and coordinated efforts by oil marketing companies (OMCs) helped maintain stable supplies despite challenging global supply chains."
The government also reaffirmed its push to expand piped natural gas (PNG) usage among commercial and industrial consumers.
"At the same time, the government remains committed to expanding PNG connectivity.
Commercial and bulk consumers who have already shifted to piped natural gas (PNG) will continue to remain on PNG.
Other eligible LPG consumers having access to the PNG network, or those in the process of shifting to PNG, will be progressively transitioned to PNG in coordination with city gas distribution (CGD) entities," the statement said.
The Petroleum Secretary has written to chief secretaries of all states and Union Territories to facilitate implementation of the revised supply arrangements.