India Boosts Commercial LPG to 70% to Shield Key Industries Amid Global Crisis

In an 'X' post, Pradhan shared a letter to Petroleum Ministry Secretary Neeraj Mittal, stating that this decision, including an additional 20% allocation is a timely measure to bolster industrial resilience.

"Amid the ongoing West Asia conflict and its ripple effects on global energy supply chains, this well-calibrated decision to enhance commercial LPG allocation to 70% of pre-crisis levels, including an additional 20%, comes as a timely step to strengthen industrial resilience. It will provide critical support to key sectors such as steel, textiles, chemicals, and automobiles," the 'X' post from Pradhan said. Pradhan added that while many countries face supply disruptions and rising costs, India's approach demonstrates balance and foresight. He expressed gratitude to Prime Minister Narendra Modi and Union Minister Hardeep Singh Puri for ensuring labour-intensive industries receive reliable energy access through reform-linked allocations, thereby promoting efficiency and sustaining economic momentum.

"While several countries grapple with supply disruptions and rising costs, India's approach stands out for its balance and foresight. Deep appreciation to Prime Minister Narendra Modi and Union Minister Hardeep Singh Puri for ensuring that labour-intensive industries remain supported through reform-linked allocations. This ensures dependable energy access while reinforcing efficiency and sustaining economic momentum," the 'X' post said.

The secretary in the Ministry of Petroleum Neeraj Mittal on Friday wrote to all Chief Secretaries of States and Union Territories stating that several states have carried out some or all the reforms regarding the allocation of non-domestic LPG to various sectors. On March 16 the states had been allotted 40% of pre-crisis quota and another 10% was allotted based on achievement of certain reforms to promote PNG.

The secretary informed that in addition to the existing 50% allocation as made earlier, an additional 20% is now proposed, that would bring the total commercial LPG allocation to 70% of the pre-crisis level of the packed non-domestic LPG.

The secretary said this additional 20% allocation shall adhere to the following stipulations:

1. Additional allocation shall be given to industries with priority to steel, automobile, textile, dye, chemicals, and plastics, which are labour-intensive and provide support to other essential sectors. Among these, priority shall be given to process industries or those requiring LPG for specialised heating purposes that cannot be substituted by Natural Gas.

2. The conditions mentioned in paragraph (b) of the letter dated March 21 mentioned above regarding registration with OMCs, and in paragraph (c) regarding application for PNG to CGD entities must also be fulfilled by entities to receive LPG under this additional 20%. If industries specified in paragraph 1 of this letter where LPG is used in the process and for special purposes which cannot be substituted by Natural Gas, such requirement would stand waived.

The secretary also urged all states to avail of the 10% reform-based allocation immediately, if they have not already done so. The secretary said that with this the allocation to commercial/industrial LPG will rise to 70% (with 10% reform based) and enable relief to industrial operations in the state.

Meanwhile, in another move to protect consumers from any spike in fuel prices due to the West Asia crisis, the government on Friday slashed excise duties for petrol and diesel bringing them down to Rs 3 per litre of petrol and zero for a litre of diesel. Windfall tax on export of diesel has been set at 21.5 rupees/litre.

The reduction comes amid a global energy crisis due to the US-Israel war on Iran and the consequent Tehran-imposed blockade on the Strait of Hormuz, through which a fifth of the world's crude oil and gas supply, between 20 and 25 million barrels per day, is shipped. Before the conflict, India bought 12 to 15 per cent of that oil.

- ANI