Govt increases commercial LPG allocation up to 50%, with latest hike aimed at restaurants, dhabas, and canteens.

Amid a sharp reduction in commercial LPG supplies that severely impacted restaurants, hotels, and small food businesses, the Centre has approved an additional 20% allocation of commercial LPG for key sectors, including eateries, dhabas, industrial canteens, food processing units, dairy sectors, and community kitchens. The move also covers refills of 5-kg cylinders for migrant workers. With this increase, total commercial LPG allocation to states can now go up to 50% of estimated demand. However, to access this supply, businesses must register with public sector oil companies and apply for piped natural gas (PNG) connections.

The supply cut was initially implemented to prioritise household LPG needs after disruptions in imports due to tensions in West Asia and the closure of the Strait of Hormuz, a key supply route. India relies on imports for around 60% of its LPG demand, with most coming from this region. To manage the crisis, the government boosted domestic LPG production by diverting resources from petrochemicals, increasing output by about 40%. This improvement has helped ease supply concerns and enabled the recent increase in commercial allocation.

At the same time, the government is pushing consumers to shift to PNG to reduce dependence on LPG. Over 1.25 lakh new gas connections have been issued recently, and thousands of LPG users have already transitioned. Authorities and gas companies are also offering incentives and accelerating infrastructure expansion to support this shift. While challenges remain due to ongoing geopolitical uncertainties, LPG supply across the country is currently stable, with no reported shortages and reduced panic bookings.