Winning Bizness Desk
Mumbai.The government has asked hotels, restaurants and commercial kitchens to move away from LPG and adopt piped natural gas (PNG) to ensure uninterrupted fuel supply, as global tensions disrupt energy availability. The Petroleum and Natural Gas Ministry has directed City Gas Distribution companies to prioritise PNG connections for commercial establishments so that their operations are not affected by supply fluctuations.
Priority push for PNG connections to commercial units
The ministry has also written to central ministries and state governments, urging them to speed up approvals related to gas infrastructure. The focus is on clearing pending projects and granting new permissions quickly to expand PNG networks. Government offices, residential colonies and canteens under the Centre have been advised to switch to PNG wherever feasible, reducing dependence on LPG cylinders during the ongoing supply strain.
LPG supply to states increased by twenty percent
Amid the gas shortage, the Centre has decided to increase LPG supply to states by 20 percent starting March 23. Despite this increase, the total supply will reach only about 50 percent of pre-crisis levels. States have been instructed to prioritise distribution for essential and high-demand segments.
Key priority categories include:
- Community kitchens and relief centres
- Restaurants, roadside eateries and hotels
- Industrial and institutional canteens
- Migrant workers needing smaller cylinders
The government has also directed that migrant labourers should be given priority access to 5 kg free trade LPG cylinders to ensure basic cooking needs are met.
Understanding pre-crisis supply benchmark levels
The term pre-crisis level refers to the period before the current disruption in gas supply began. In recent weeks, states were receiving significantly reduced LPG allocations, leading to pressure on supply chains. The revised allocation now aims to restore supply to half of the earlier normal demand, offering partial relief but not full restoration.
Global conflict disrupts oil and gas supply routes
The supply crunch has been triggered by escalating tensions in the Middle East, particularly following coordinated airstrikes by the United States and Israel on Iran on February 28, 2026. The strikes targeted military bases, missile installations and nuclear facilities. The operation, named Operation Epic Fury by the US, resulted in the death of several top Iranian officials, including Supreme Leader Ali Khamenei.
Impact highlights:
- Strait of Hormuz witnessing heightened tensions
- Major disruption in crude oil and LPG shipments
- Global supply chains facing uncertainty
India’s heavy dependence on this route has amplified the impact of the disruption.
India’s import dependence worsens supply concerns
India imports nearly 80 to 85 percent of its LPG through routes passing the Strait of Hormuz, making it highly vulnerable to geopolitical tensions in the region. The country is the world’s second-largest LPG importer, with over 60 percent of its gas demand met through imports.
The initial response to the crisis involved cutting LPG supply to commercial establishments to protect domestic consumers. However, this created shortages for hotels and other bulk users, prompting the government to push for PNG as a more stable alternative.
At the same time, the government has urged citizens not to panic, maintaining that there is no absolute shortage of fuel in the country. Officials have cautioned against rumours, stating that supply management measures are being taken to balance demand and ensure essential services continue without disruption.
