As a deepening cooking gas crunch disrupts businesses across the country, the Centre has stepped in to ease supplies by raising LPG allocation for commercial users — but with conditions that signal a longer-term shift away from cylinders.
The government has increased commercial liquefied petroleum gas (LPG) allocation to 50 percent of requirement, adding an extra 20 percent to the existing quota.
The move comes as restaurants, hotels and small food businesses grapple with acute supply shortages triggered by disruptions in West Asia.
According to the March 21 order issued by the Ministry of Petroleum and Natural Gas, the additional allocation will be prioritised for key sectors:
Restaurants and dhabas
Hotels and industrial canteens
Food processing and dairy units
Subsidised canteens run by state governments or local bodies
Community kitchens
5 kg free trade LPG for migrant workers
Commercial users seeking the enhanced quota must meet stricter compliance requirements.
Mandatory registration with oil marketing companies (OMCs)
Disclosure of sector of use and annual LPG requirement
Application for piped natural gas (PNG) connection
Businesses must also demonstrate readiness to transition to PNG through the local city gas distribution (CGD) network to qualify for the full allocation.
The policy underscores the government’s push to move commercial users away from LPG cylinders towards PNG, amid tightening supplies.
Earlier, commercial LPG allocation had been sharply curtailed to just 20 percent of average monthly requirement, as supplies were diverted to domestic households. A further 10 percent was later allowed for states undertaking reforms to support PNG adoption.
The current shortage is linked to the ongoing geopolitical tensions in West Asia, which have disrupted supply chains.
India relies heavily on imports for LPG — around 60 percent of domestic demand — with nearly 90 percent sourced from the region. The crisis has exposed the vulnerability of supply and accelerated the policy push towards alternative distribution systems.
While the increased allocation offers short-term relief, the conditions attached make it clear that commercial users will need to gradually transition to piped gas to ensure stable supplies going forward.