4 min readNew DelhiMar 10, 2026 04:52 PM IST
With liquefied natural gas (LNG) supplies to India hit due to effective halt in shipments through the Strait of Hormuz amid the West Asia conflict, the government has invoked the Essential Commodities Act to divert natural gas to “priority sectors” that are dependent on the fuel. The order, issued by the Ministry of Petroleum and Natural Gas (MoPNG) lists four priority categories that shall receive, subject to availability, natural gas in varying quantities based on their average gas consumption levels of the past six months.
The top priority category, which will receive 100% of the average gas consumption of the last six months, include piped natural gas (PNG) for households and compressed natural gas (CNG) for vehicles, both of which directly impact millions of common Indians. This category also includes natural gas used for LPG production, and gas consumed for essential pipeline operations. The second priority category, according to the order, is fertiliser units, which will receive 70% of their average gas consumption of the past six months.
“The supply of natural gas to the fertilizer plants shall ensure seventy per cent of their past six month average gas consumption, subject to operational availability: Provided that the units shall not use the gas supply for any other purpose except in the production of fertilizers and a certificate to this effect shall be furnished to the Petroleum Planning and Analysis Cell (PPAC)…through the Ministry of Fertilizer: Provided further that allocation to a particular unit may not be diverted to any other unit,” the MoPNG order said.
The third category includes “tea industries, manufacturing and other industrial consumers supplied through the national gas grid”, for which supply will be maintained at 80% of their six-month average consumption. In the fourth category are commercial and industrial consumers of City gas distribution companies; they will get 80% of their past six-months average gas use.
Apart from domestic gas and imported LNG, the natural gas required to meet the demand of these priority sectors will be met “through full or partial curtailment” of gas supplied to some petrochemical manufacturing units and gas-based power plants. Natural gas supplies to refineries has been cut to 65% of their average consumption of the past six months.
India depends on LNG imports to meet around half of its natural gas requirement, and over 50% of those LNG imports come from countries like Qatar and the UAE through the critical chokepoint of Strait of Hormuz, where maritime traffic has effectively stopped for 10 days now. According to industry estimates, volumes coming via the Strait account for roughly 30% of India’s overall gas consumption–through domestic supplies as well as LNG imports. The crisis has hit LNG supplies to India, prompting the government to take emergency measures to ensure continuos supplies to sectors that need them the most. Indian oil and gas companies are also scouting for LNG cargoes from the spot market; LNG from other source markets continues to come in.
With Iran warning vessels to not transit through the Strait of Hormuz, and even hitting a few vessels that were passing through the waterway, there is an effective halt in maritime traffic through the Strait with most trading houses, insurers, and vessels loath to get involved in the prevailing extremely high-risk environment.
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