Cooking gas shortage: Centre says 20% of average monthly commercial LPG to be allocated from today by OMCs

Amid reports of a shortage of cooking gas supply across India, the central government on Thursday announced that 20% of the average monthly commercial LPG requirement will be allocated from Thursday, 12 March, by oil marketing companies (OMCs) in coordination with the state governments, so that there is no hoarding or black marketing.

The announcement was made by Union Petroleum and Natural Gas Minister Hardeep Singh Puri in the Lok Sabha.

The development comes in the wake of the disruptions to global energy supply arising from the ongoing US-Israeli conflict with Iran in West Asia.

Commercial LPG regulated

“In a major decision, 20% of the average monthly Commercial LPG requirement will be allocated from today by OMCs, in coordination with the state governments, so that there is no hoarding or black marketing,” said Hardeep Puri.

“Commercial LPG has been regulated to prevent black marketing, not to penalise the hospitality sector,” he added.

The oil minister further explained that commercial LPG is sold in a completely deregulated, over-the-counter market at market price, without any government subsidy. There is no registration system, no booking requirement, no digital authentication, and no delivery confirmation mechanism.

India produces approximately 90 MMSCMD (million metric standard cubic metres per day) of natural gas domestically. A further 30 MMSCMD was previously imported from Gulf sources, now affected by the force majeure declaration from a major Qatari processing facility.

On 9 March, the Oil Ministry issued the Natural Gas Control Order under the Essential Commodities Act to establish a priority sequence.

According to the order, domestic piped gas (PNG) to homes and CNG for vehicles will get 100% supply with no cuts. Industrial and manufacturing consumers will receive up to 80% of their previous six-month average, while fertiliser plants will get up to 70%.

LNG cargoes are arriving via alternative supply routes

Puri informed the House that large LNG cargoes are arriving on an almost daily basis through alternative supply routes. "India has sufficient gas production and supply arrangements to sustain this position even in the event of a prolonged conflict.”

“The world has not faced a moment like this in modern energy history. Today is the 13th day since the passage through the Strait of Hormuz, through which 20% of the world’s crude, 20% of the world’s natural gas and 20% of the world’s LPG flows, was disrupted following the military operation between Iran, Israel and the US. For the first time in recorded history, the Strait of Hormuz has been effectively closed to commercial shipping,” the minister noted.

“Despite India having no role in causing the conflict, like many countries, India has to navigate through its consequences,” the minister added.

Fuel supply chains functioning normally, says minister

On the crude oil supply issue, Puri assured that India’s position is secure and crude volumes secured have exceeded what the Strait of Hormuz would have delivered.

Before the beginning of the Middle East crisis, approximately 45% of India’s crude imports transited the Hormuz route, he said.

Currently, India sources crude oil from 40 countries, against 27 in 2006-07.

Assuring that refineries are operating at high capacity utilisation, he said: “There is no shortage of petrol, diesel, kerosene, ATF or fuel oil. The availability of petrol, diesel, aviation turbine fuel, kerosene, and fuel oil is fully assured. Retail outlets across the country are stocked and supply chains for these products are functioning normally.”