The LPG shortage crisis, which has been created due to the ongoing disturbance in West Asia, has officially hit India with major restaurants across Indian metropolitan cities like Bangalore, Mumbai and Chennai highlighting the issue. Reports also suggest that operations of food delivery platforms such as Swiggy and Zomato may also be hit as restaurants have been impacted. LPG shortage is mainly due to supply disruptions linked to Iran war and LNG shipment constraints through the Strait of Hormuz. India was getting 30% of its natural gas from Hormuz. Some suppliers have declared force majeure, meaning they cannot supply gas as agreed.
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Will Indian Homes Be Impacted Due to LPG Shortage?
In order to combat this issue, the Indian Government has notified the Natural Gas (Supply Regulation) Order, 2026, prioritising gas allocation to essential sectors. The government is using powers under the Act to allows it to regulate the supply and distribution of important commodities like petroleum and natural gas when needed. The order allows the government to control how natural gas is produced, allocated, and used so that essential sectors continue to get supply.
The government has, therefore, created priority categories to decide who gets gas first, which are as follows:
Priority Sector I (Highest priority)
Gas will first go to essential public needs:
- Domestic piped natural gas (PNG) for households
- CNG for vehicles and public transport
- LPG production
- Pipeline operations and compressor fuel
Priority Sector II
- Fertilizer plants
- They will receive around 70% of their average gas consumption from the past six months, depending on availability.
Priority Sector III
- Other important industrial sectors (allocation rules to be decided by the PPAC – Petroleum Planning and Analysis Cell with industry bodies).
Priority Sector IV
- Industrial and commercial users connected through City Gas Distribution (CGD) networks
- They will receive around 80% of their average gas consumption from the last six months, depending on availability.
In addition to this, India is also purchasing natural gas from other routes to combat the short supply. Therefore, Indian households are unlikely to be hit by the LPG shortage for the time being.
Industries that may Face Reduced Supply
Refineries may have their gas supply reduced to about 65% of their past six-month consumption. Some sectors may receive less gas to balance supply, such as:
- Petrochemical plants, which are facilities operated by ONGC, GAIL, and Reliance among others.
- Power plants.
- Oil refineries.
