NEW DELHI: Amid disruptions in global LNG supplies due to the ongoing conflict in West Asia, the government has notified the Natural Gas (Supply Regulation) Order, 2026, under which gas consumers have been divided into different priority categories with supply to each sector being fixed based on their past consumption.
The order, dated March 9, 2026, came into effect immediately after it was published in the official gazette.
The highest priority has been given to sectors considered essential for daily use and energy supply. These include domestic Piped Natural Gas (PNG) used by households, Compressed Natural Gas (CNG) used in transport, LPG production, and fuel required for pipeline operations.
The government has directed that these sectors should receive up to 100% of their average gas consumption of the past six months, subject to operational availability. This means household cooking gas supply, CNG availability for vehicles and LPG production are expected to remain largely unaffected.
Fertilizer plants have been placed under Priority Sector II and will receive 70% of their average gas consumption over the past six months. The government has said that the gas must be used only for fertilizer production.
According to the notification, fertilizer companies will have to submit a certificate confirming that the gas is being used only for producing fertilizers. The gas allocated to one plant cannot be transferred to another unit.
Tea industries, manufacturing units and other industrial consumers connected to the national gas grid have been placed under Priority Sector III. These industries will receive 80% of their average gas consumption over the past six months.
Similarly, industrial and commercial consumers receiving gas through City Gas Distribution networks have been placed under Priority Sector IV and will also receive 80% of their average consumption.
The detailed rules for allocating gas within these sectors will be decided by the Petroleum Planning and Analysis Cell in consultation with industry representatives.
Gas to be diverted from non-priority consumers
To maintain supply to priority sectors, the government said gas will be diverted from non-priority consumers, starting with petrochemical facilities. These include units such as ONGC Petro additions Limited, the Pata Petrochemical Complex operated by GAIL (India) Limited, and the oil-to-chemicals business of Reliance Industries Limited.
Gas-based power plants may also face supply reductions if required. Oil refining companies have also been asked to reduce their gas consumption to about 65 per cent of their average usage over the past six months, depending on operational feasibility.
The order also introduces a gas-pooling mechanism under which gas diverted from non-priority sectors will be pooled and supplied to priority sectors. The pooling system will be managed by GAIL (India) Limited, while the pooled price will be determined by the PPAC.
Companies receiving pooled gas will have to accept the pooled price and will not be allowed to resell the diverted gas or challenge the arrangement through litigation.
The move comes after QatarEnergy, India's primary LNG supplier, declared force majeure following a production halt at the Ras Laffan facility after drone strikes. The company has effectively reduced LNG allocations to Indian buyers to zero. Qatar—India's largest LNG supplier—exports around 11.4 million metric tonnes (mmt) of LNG to India every year, accounting for more than 40 per cent of the country's LNG imports. Around 55 per cent of India's LNG shipments pass through the Strait of Hormuz.