Hormuz disruptions: Govt sets priority gas allocations; full supply for homes and transport, cuts for industry

The Centre has notified four priority sectors for natural gas supply, ensuring full allocation for households and transport while mandating reduced supplies for several industrial users after disruptions in LNG shipments through the Strait of Hormuz.

US-Israel-Iran war LIVE Updates

Also read: 'Oil inventories at five-year low': Aramco CEO warns of 'catastrophic' consequences if Hormuz closure goes on

In an order issued on Monday night, the government said supplies to domestic piped natural gas (PNG), compressed natural gas (CNG) for transport, LPG production and essential pipeline operations will be maintained at 100 percent of their average gas consumption over the past six months, subject to operational availability.

Also read: Sri Lanka hikes fuel prices by 8% to curb panic buying amid rising global oil prices

The order places fertiliser plants in the second priority category, with gas supplies to be maintained at 70 percent of their six-month average consumption, provided the fuel is used solely for fertiliser production.  

Tea industry, manufacturing units and other industrial consumers connected through the national gas grid have been placed in the third priority category and will receive around 80 per cent of their previous six-month average consumption, depending on availability. 

In the fourth category, industrial and commercial consumers supplied through city gas distribution networks will also receive around 80 per cent of their past six-month average consumption. 

To meet the requirements of these sectors, the government said supplies would be curtailed from lower-priority users, including petrochemical facilities and, if necessary, power plants. Refinery gas allocations may also be reduced to around 65 percent of their previous six-month average consumption to absorb the impact of LNG supply disruptions. 

The move follows disruptions in liquefied natural gas shipments through the Strait of Hormuz amid the ongoing conflict in West Asia, with some suppliers invoking force majeure clauses. 

The order also states that its provisions will override existing gas sale agreements and other commercial arrangements where inconsistencies arise. 

Issued under powers available to the government under the Essential Commodities Act, the directive allows the Centre to regulate production, allocation and distribution of natural gas to ensure equitable supply to priority sectors.

The Natural Gas (Supply Regulation) Order, 2026, which came into force immediately upon publication in the official gazette late Monday night, directs gas producers, marketers, pipeline operators and city gas distributors to revise supply schedules and allocations in coordination with GAIL and the Petroleum Planning and Analysis Cell (PPAC). 

To manage the financial impact of these diversions, the Petroleum Planning and Analysis Cell (PPAC) will notify a pooled price for the redirected gas on a periodic basis. GAIL (India) Limited has been designated to coordinate the physical diversion of volumes, and all entities receiving gas under this emergency mandate will be required to provide a legal undertaking accepting the notified pooled price, regardless of prior contractual rates.