Govt hikes LPG allocation to 70% for pharma, food and agri sectors

LPG allocation raised to 70 per cent for key industrial sectors, with cap of 0.2 thousand tonnes per day per sector and conditions for eligibility

The government on Wednesday increased the allocation of liquefied petroleum gas (LPG) to 70 per cent for industrial units in the pharmaceutical, food, polymer, agriculture, and several other sectors. The allocation will be capped at 200 tonnes per day for each sector, according to a communication from the Ministry of Petroleum and Natural Gas (MoPNG).

 

“Industrial units in the sectors of pharmaceutical, food, polymer, agriculture, packaging, paint, uranium, heavy water, steel, seed, metal, ceramic, foundry, forging, glass, aerosol, etc. shall receive 70 per cent of the units’ pre-March 2026 bulk non-domestic LPG consumption level, subject to an overall sectoral limit of 200 tonnes per day,” Neeraj Mittal, secretary, MoPNG, said in a letter to states.

   

Units will be required to register with state-run oil-marketing companies to be eligible for the additional allocation. Commercial users will also need to apply for piped natural gas (PNG) with the city gas distribution company and take steps to adopt PNG.

 

“However, if the industries mentioned above use LPG as an integral input in the manufacturing process or for specialised purposes that cannot be substituted by natural gas, the requirement relating to application for PNG shall stand waived,” the letter added.

 

In a media briefing on the West Asia crisis, the government also said it has increased overall natural gas allocation by 5 per cent for fertiliser plants to about 95 per cent of the units’ six-month average consumption.

 

In a relief to the petrochemical (petchem) sector, the government allowed 800 million tonnes (mt) per day of propane and butane to be diverted for petchem production.

 

Officials said that to ensure coal affordability, Coal India (CIL) has reduced the reserve price of coal by 20 per cent under e-auctions and increased supply through both e-auctions and the state-nominated agency mechanism.

 

CIL also increased the frequency of e-auctions in March 2026, offering 32.53 mt of coal, of which 13.32 mt was booked. For April 2026, 30 e-auctions have been planned, offering 25.8 mt, with 3.2 mt offered so far and 1.24 mt booked, the government said.