Natural Gas Supply Prioritisation in India: Ensuring Energy Security Amid Global Crisis
25 March 2026
Natural Gas Supply Prioritisation in India: Ensuring Energy Security Amid Global Crisis
The Government of India has invoked the Essential Commodities Act, 1955 to prioritise natural gas supply to critical sectors amid disruptions in LNG shipments through the Strait of Hormuz. This tiered allocation ensures uninterrupted domestic PNG and LPG supply, supports CNG for transportation, stabilises fertilizer production, and maintains industrial operations. By implementing this strategic prioritisation, India demonstrates proactive energy management and safeguards households, agriculture, and industry during
Why in the News?
The Government of India has invoked the
Essential Commodities Act, 1955
to prioritise the supply of natural gas to important sectors of the economy.
This decision was taken by the
Ministry of Petroleum and Natural Gas
through a gazette notification dated March 9, 2026.
The step was taken because of disruptions in
Liquefied Natural Gas (LNG) shipments passing through the Strait of Hormuz
due to tensions and conflict in West Asia.
Around
30% of India’s natural gas imports pass through the Strait of Hormuz
, which makes the situation critical for India’s energy supply.
The government has therefore created a
tiered priority system
to distribute natural gas among different sectors.
What are the Key Highlights?
Invocation of Emergency Law
The government used the
Essential Commodities Act, 1955
to control and prioritise natural gas supply.
This law allows the government to regulate the production, supply, and distribution of essential goods during emergencies.
Reason for the Decision
LNG shipments through the
Strait of Hormuz
have been disrupted.
Suppliers have invoked
force majeure
, which means they cannot fulfil contracts due to unexpected events such as war.
India’s Natural Gas Situation
India consumes about
195 million metric standard cubic metres per day (MMSCMD)
of natural gas.
India
imports about half of its natural gas requirement
.
Priority Allocation System
The government introduced a
tiered structure
to allocate gas to different sectors.
Highest Priority Sectors (100% supply)
Domestic
Piped Natural Gas (PNG)
supply.
Compressed Natural Gas (CNG)
used as vehicle fuel.
Liquefied Petroleum Gas (LPG)
production.
Supply will be maintained at
100% of the average consumption of the previous six months
, subject to availability.
Second Priority Sector
Fertilizer plants
will receive
70% of their average gas consumption
from the last six months.
Industrial and Manufacturing Sectors
Industries connected to the natural gas grid will receive
80% of their normal gas requirement
.
City Gas Distribution (CGD) companies must also ensure the same supply level to industrial and commercial consumers.
Reduction in Supply to Certain Companies
Gas supply may be reduced or partially curtailed to companies such as:
ONGC Petro additions Limited
GAIL Pata Petrochemical plant
Reliance Industries O2C (Oil to Chemicals) business
Impact on Oil Refineries
Oil refineries will reduce gas consumption to
about 65% of their average consumption
over the past six months.
Government Focus on Agriculture
The
Ministry of Chemicals and Fertilizers
welcomed the decision.
The move aims to ensure that fertilizer production continues smoothly for the upcoming
Kharif sowing season
.
High-Level Government Meeting
Senior officials from the
Ministry of Petroleum and Natural Gas
and fertilizer companies met to review preparedness and challenges.
What are the Significance?
Ensuring Energy Security
The priority system helps maintain
stable supply of natural gas
to essential sectors.
It prevents sudden shortages in critical areas such as cooking fuel and transportation.
Protection of Household Energy Needs
Domestic PNG and LPG production have been given
top priority
.
This ensures that households continue to receive
cooking gas without major disruptions
.
Supporting Public Transportation
CNG used in vehicles has been placed in the highest priority category.
This ensures that
public transport systems and CNG vehicles continue operating normally
.
Securing Fertilizer Production
Fertilizer plants depend heavily on natural gas.
By ensuring
70% supply
, the government aims to prevent fertilizer shortages.
This helps farmers during the
Kharif cropping season
.
Stabilising Industrial Production
Industries and manufacturing units will still receive
80% of their gas needs
.
This prevents a major slowdown in industrial activity.
Crisis Management During Global Conflict
The decision shows how India can
quickly respond to international supply disruptions
.
The disruption at the
Strait of Hormuz
demonstrates how geopolitical tensions affect energy supply.
Balanced Distribution of Limited Resources
The tiered allocation system distributes limited natural gas supplies
based on national priorities
.
Essential sectors receive more supply, while less critical sectors receive reduced allocation.
Challenges
Heavy Dependence on Energy Imports
India imports about
50% of its natural gas requirement
.
Supply disruptions abroad can easily affect the domestic economy.
Vulnerability to Geopolitical Conflicts
A large portion of India’s energy imports pass through the
Strait of Hormuz
.
Conflicts in West Asia can therefore directly threaten India’s energy security.
Impact on Industrial Sector
Industries receiving only
80% supply
may face:
Production slowdowns
Higher operational costs
Reduced Supply to Petrochemical Sector
Companies like
ONGC Petro additions Limited
,
GAIL
, and
Reliance Industries
may face reduced production capacity.
Pressure on Refineries
Oil refineries operating at
65% gas supply
may face operational challenges.
Rising Energy Prices
Global conflicts can increase oil and gas prices.
This can lead to
higher import bills and inflation
.
Way Forward
Diversifying Energy Import Sources
India should import natural gas from
multiple regions
.
This will reduce dependence on a single route like the
Strait of Hormuz
.
Expanding Domestic Gas Production
Increasing domestic exploration and production can improve
energy self-sufficiency
.
Building Strategic Gas Reserves
India can create
strategic reserves of natural gas
to manage emergency supply disruptions.
Promoting Renewable Energy
Increasing the share of
solar, wind, and other renewable energy sources
will reduce reliance on imported fossil fuels.
Improving Energy Efficiency
Industries and households can adopt
energy-efficient technologies
.
This will reduce total energy demand.
Strengthening Energy Diplomacy
India should strengthen
energy partnerships with multiple countries
.
Long-term contracts can help ensure stable supply during global crises.
Conclusion
The recent policy decision shows the importance of careful resource management during uncertain global situations. By prioritising critical sectors and planning for disruptions, governments can reduce the impact of international crises on domestic economic and social stability while preparing the economy for future energy challenges.
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