Govt hikes commercial LPG allocation to 50 per cent as domestic output improves

 Government Increases Commercial LPG Allocation Amid Improving Supply Situation

PTI, March 21, 2026, New Delhi : The Union government has approved an additional 20 per cent allocation of commercial LPG to states and Union Territories, taking the total allocation to 50 per cent, as increased domestic output is helping the situation crawl back to normalcy.

The three-week-long war in the Middle East disrupted energy supplies to India, leading to initial curtailment in LPG supplies to commercial establishments like hotels to prioritise supplies to household kitchens. Later, a fifth of their supplies were restored, and the government offered an additional 10 per cent, subject to states expediting piped gas projects.

On Saturday, the government announced a 20 per cent enhanced allocation to key sectors such as restaurants, hotels, industrial canteens, food processing units, community kitchens and subsidised food outlets, while also supporting migrant workers through targeted distribution.

The additional allocation will be subject to commercial establishments registering with oil companies and applying for a piped natural gas connection, according to a letter written by the oil secretary to states.

An official statement said domestic LPG supply remains stable, with no reported shortages at distributorships and normal delivery operations continuing. Panic bookings have declined, and citizens have been advised to avoid crowding and rely on home delivery.

To ease supply pressures, the government is also promoting a shift towards piped natural gas (PNG), particularly for commercial establishments, and has urged states to expedite approvals for city gas distribution networks.

In parallel, all refineries are operating at high capacity with adequate crude inventories, ensuring sufficient availability of petrol and diesel. No fuel shortages have been reported at retail outlets, and the public has been advised against panic buying, it said.

Natural gas supplies to priority segments, including domestic PNG and CNG transport, are being fully maintained, while industrial consumers are receiving about 80 per cent of their usual supply.

Additional steps include increased domestic LPG production, extended booking intervals, and allocation of extra kerosene supplies to states to provide alternative fuel options.