New Delhi, March 10: The Central Government has issued a formal order to regulate the distribution of natural gas across the nation, placing a primary focus on domestic supplies and transport sectors. Invoking the Essential Commodities Act of 1955, the Union Ministry of Petroleum and Natural Gas introduced the Natural Gas (Supply Regulation) Order, 2026. This move follows significant interruptions in Liquefied Natural Gas (LNG) shipments traveling through the Strait of Hormuz.
According to the directive, the ongoing conflict in the Middle East has hampered maritime transit, leading several international suppliers to invoke force majeure clauses. This has created a necessity for the state to manage remaining stocks to prevent a domestic energy crisis. Under the new guidelines, the government asserted that “equitable distribution of gas” is the primary goal until shipment stability returns.
Priority Sector I, which includes domestic piped natural gas (PNG), transport-based compressed natural gas (CNG), and LPG production, will receive 100 percent of its average consumption based on the previous six months. This allocation remains subject to operational availability but is intended to protect the daily needs of citizens and public transport.
The agricultural sector has also been categorized as a high priority. Fertilizer plants, listed under Priority Sector II, are slated to receive at least 70 percent of their six-month average usage. To maintain this supply, these units must provide certification to the Petroleum Planning and Analysis Cell (PPAC) through the Ministry of Fertilizers, ensuring the gas is used strictly for crop nutrients.
Industrial consumers face varying levels of supply. Tea manufacturing and other grid-connected industries under Priority Sector III, along with commercial entities under Priority Sector IV, are expected to receive approximately 80 percent of their past average consumption. To facilitate these levels, the government declared that non-priority sectors, including petrochemical units and power plants, will face initial reductions.
Oil refineries are also expected to adjust their operations. These facilities will reduce consumption to roughly 65 percent of their recent averages. Gas Authority of India Limited (GAIL) will oversee the implementation in coordination with the PPAC. GAIL stated that it will manage the diversion of supply and submit pricing data to ensure a pooled price for redirected volumes.
The order clarified that these new regulations will override all existing Gas Sale Agreements or commercial contracts. All major producers and importers, including ONGC, Reliance Industries, and Oil India Limited, were directed to comply with the revised schedules immediately.
