• Source:JND
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With the disruption of liquefied natural gas supplies to India, caused by a near halt in supplies via the Strait of Hormuz due to the worsening West Asia conflict, the Indian government has resorted to enacting the Essential Commodities Act to divert natural gas to "priority sectors" that are heavily dependent on natural gas.

According to an order issued by the Ministry of Petroleum and Natural Gas (MoPNG), sectors that are vital to millions of ordinary citizens, such as piped natural gas for household use, compressed natural gas for vehicles, and liquefied petroleum gas production, are to be given preference over other sectors that use natural gas.

The Indian government has also made changes to the allocation of natural gas produced in the country, so that sectors such as cooking gas and transportation are supplied in their entirety before other sectors are supplied their quota of natural gas.

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Govt Rearranges Gas Allocation: Key Changes

- The highest priority category, which will receive 100 per cent of the average gas consumption over the last six months, includes domestic PNG (gas supplied to households), CNG for the transport sector, natural gas used for LPG production, and gas required for essential pipeline operations.

Previously, CNG and piped gas to household kitchens (referred to as piped natural gas) were classified under a "no-cut" category, meaning that gas allocation would not be reduced even in the event of supply shortages. Now, LPG has been added to this category. Under the revised allocation, the requirements for these sectors will be fully met before any gas is supplied to other industries, according to a gazette notification.

- The fertiliser sector has been placed in the second priority category, with at least 70 per cent of its past six months' demand being met.

- In third place, gas supplies to the tea industry, manufacturing, and other industrial consumers will be maintained at 80 per cent of their average gas consumption over the past six months, subject to operational availability.

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- The fourth category consists of commercial and industrial consumers of city gas distribution companies, who will receive 80 per cent of their past six months' average gas use. Public sector gas major GAIL will manage the natural gas supplies for the purposes of this order.

Following US-Israeli strikes inside Iran and Tehran's sweeping retaliation across the region, maritime traffic through the Strait of Hormuz has sharply declined, insurance premiums have surged, and energy markets have responded with immediate volatility. Roughly one-fifth of the world's seaborne oil and nearly a third of global LNG shipments pass through this narrow channel linking the Gulf to global markets.


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