NEW DELHI: The Petroleum Ministry has directed Oil Marketing Companies (OMCs) and City Gas Distribution (CGD) entities to identify and serve notices to domestic LPG consumers in areas where Piped Natural Gas (PNG) infrastructure is already available, asking them to shift to PNG for cooking purposes.
According to a letter written by Petroleum Secretary Dr. Neeraj Mittal to state governments, OMCs and CGD entities have been directed to issue notices to two categories of consumers. The first category includes households that have already been provided PNG domestic connections but continue to retain LPG connections. Such consumers will be required to surrender their LPG connections.
"This will prevent scope for black marketing of LPG and unnecessary use of precious LPG in households where PNG is available," the letter reads.
The second category comprises consumers residing in areas where PNG infrastructure is available in their vicinity but who continue to use LPG. These consumers will be encouraged to migrate from LPG to PNG to reduce dependence on imported LPG.
The move comes amid a supply crisis triggered by the ongoing conflict in West Asia, which has disrupted shipping through the Strait of Hormuz, a critical global energy transit route. The waterway handles nearly 40% of India's crude oil imports, 60% of its LNG imports and about 90% of its LPG imports.
LPG has been the most affected fuel, as India imports nearly 60% of its total domestic LPG requirement, of which around 90% is sourced through the Strait of Hormuz from countries such as Qatar, Saudi Arabia, the UAE and Kuwait.
To address the supply disruption, India increased domestic LPG production by more than 60%, from around 32,000 tonnes per day to about 52,000 tonnes per day. The country also diversified its imports by sourcing additional supplies from the United States, Canada and Algeria.
Despite these efforts, LPG consumption declined by about 20% year-on-year to 2.13 million tonnes in May 2026, compared with 2.68 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).
To offset the higher costs arising from diversified imports, the government increased the price of domestic LPG cylinders twice in 2026—by Rs 60 in March and by Rs 29 in June.
Following the latest hike, the price of a 14.2-kg domestic LPG cylinder stands at Rs 942. A 19-kg commercial LPG cylinder, used by restaurants and other commercial establishments, costs Rs 3,113.50.
Domestic LPG is used by around 33 crore households, including 10.58 crore beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY), who receive subsidised cylinders. They pay Rs 642 for a 14.2-kg LPG cylinder in Delhi. However, the government has reduced the number of subsidised refills from nine cylinders to four cylinders per year.
Meanwhile, despite the price increase, the letter noted that OMCs are currently incurring losses of around Rs 690 on every domestic LPG cylinder sold. It also highlighted the subsidy burden associated with LPG consumption, particularly under PMUY, estimating the additional annual subsidy outgo at around Rs 19,000 crore.
To accelerate PNG adoption, the Petroleum Ministry has requested state governments to direct District Collectors, District Magistrates, Municipal Commissioners and other urban local body officials to work closely with CGD entities and state-level coordinators to encourage LPG consumers to switch to PNG wherever the network is available.
The government said field experience has shown that access constraints, consumer non-responsiveness and local-level issues have slowed PNG adoption despite the availability of infrastructure. Greater involvement of local administrations is expected to improve outreach efforts and facilitate a faster transition to piped natural gas.
