Narendra Modi Govt Issues Order To Regulate Natural Gas Supply Amid Shortage

PM Narendra Modi-led Central government has invoked the Essential Commodities Act, 1955, to regulate the availability, supply and equitable distribution of petroleum products and natural gas. The move comes after Liquefied Petroleum Gas (LPG) supplies were disrupted in the Strait of Hormuz, which handles the majority of India’s LPG import consignments in transit.

The order has been issued to ensure the equitable distribution of gas following disruptions in Liquefied Natural Gas (LNG) shipments. The Union Ministry of Petroleum and Natural Gas has issued the Natural Gas (Supply Regulation) Order, 2026, to regulate the production, supply and distribution of natural gas across the country in view of disruptions in LNG shipments caused by the ongoing conflict in the Middle East.

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Issued under Section 3 of the Essential Commodities Act, 1955, the order seeks to ensure that natural gas continues to be supplied to priority sectors. The government has identified four priority categories for allocation.

Government of India invokes the Essential Commodities Act, 1955, to regulate the availability, supply and equitable distribution of petroleum and petroleum products and natural gas pic.twitter.com/OqtsDwb13s

— ANI (@ANI) March 10, 2026

Under Priority Sector I, 100 per cent of the average gas consumption during the previous six months will be maintained, subject to operational availability, for domestic piped natural gas (PNG), compressed natural gas (CNG) used in transport, LPG production including shrinkage requirements, and essential pipeline operational needs such as compressor fuel.

For Priority Sector II, fertiliser plants will receive at least 70 per cent of their average gas consumption over the past six months. However, the gas must strictly be used for fertiliser production, and the concerned units will be required to furnish certification to the Petroleum Planning and Analysis Cell (PPAC) through the Ministry of Fertilisers.

Under Priority Sector III, industries such as tea manufacturing and other industrial consumers connected to the national gas grid will receive about 80 per cent of their average consumption over the previous six months, depending on operational availability.

Similarly, Priority Sector IV covers industrial and commercial consumers supplied through City Gas Distribution (CGD) networks. These consumers will also receive around 80 per cent of their past average consumption, subject to availability.

To ensure sufficient supply for priority sectors, the order provides for curtailment of gas supply to certain non-priority sectors. Petrochemical units, including facilities such as ONGC Petro Additions Limited, GAIL’s Pata Petrochemical Complex, Reliance O2C, and other high-pressure, high-temperature gas consumers, will face reductions first, followed by power plants if required.

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Oil refineries will also absorb part of the impact of LNG supply disruptions by reducing their gas consumption to approximately 65 per cent of the average usage during the previous six months, depending on operational feasibility.

The implementation mechanism will be coordinated by Gas Authority of India Limited (GAIL) in consultation with the Petroleum Planning and Analysis Cell (PPAC). GAIL will manage supply diversion and submit invoice prices of diverted gas volumes to PPAC, which will notify a pooled price for gas redirected from non-priority sectors.