Centre links extra LPG allocation to PNG push amid supply crunch; urges states to fast-track gas pipeline rollout

New Delhi: The Centre has linked an additional 10% allocation of commercial LPG to states' efforts to ease the rollout of piped natural gas (PNG) infrastructure.

"In the current LPG shortage scenario due to the West Asian crisis, OMCs are providing 20% commercial LPG for states. It would be a smart move at this stage for states to enable the transition of LPG consumers to PNG," petroleum secretary Neeraj Mittal wrote to all state governments.

The oil ministry has proposed increasing the allocation to 30%, provided states expedite clearances for pipeline laying and waive charges for laying and operating city gas networks.


City gas distribution (CGD) companies have struggled for years to connect households with PNG, missing their customer acquisition targets by a wide margin. India has about 10 million active domestic PNG customers, compared to 330 million LPG customers.

"It has been informed by the CGD entities that many local bodies levy high charges (right of use/digging charges and lease rent that are levied and retained by local bodies), which has dampened the investment climate," Mittal wrote in the letter.

The Israel-Iran war and the resulting LPG supply disruption have brought renewed focus on expanding PNG access across the country. Over the past two weeks, 120,000 new PNG connections have been added, Sujata Sharma, joint secretary in the petroleum ministry, said on Wednesday.

The LPG supply situation remains a matter of concern, and all efforts must be made to conserve energy, Sharma said.

Domestic LPG production has risen 40% from pre-war levels, she added. Before the war, domestic output met about 40% of the country's LPG needs.

India will prioritise domestic fuel needs before considering requests from other countries, Sharma said, responding to Bangladesh's demand for additional supplies.

A total of 22 India-flagged ships remain stuck west of the Strait of Hormuz. Six of these carry a combined 320,000 tonnes of LPG, said Rajesh Kumar Sinha, special secretary in ministry of ports, shipping and waterways.