Gas Supply Regulation Order Issued by Indian Government Amid West Asia Conflict
On March 9, 2026, the Central Government of India took a significant step to regulate the supply of natural gas in response to ongoing disruptions in global fuel supply chains, particularly those stemming from the conflict in West Asia. This conflict has notably affected liquefied natural gas (LNG) shipments through the Strait of Hormuz, prompting suppliers to invoke force majeure and redirect gas supplies to priority sectors.
Details of the Regulation
The government issued the Natural Gas (Supply Regulation) Order, 2026, under the Essential Commodities Act of 1955. This regulation aims to ensure equitable distribution of natural gas amid the current crisis. The order categorizes gas supply into four priority sectors, each with specific consumption allocations to manage the limited availability of gas effectively.
Priority Sectors Defined
Priority Sector I includes domestic piped natural gas (PNG), compressed natural gas (CNG), LPG production, and essential pipeline operational needs, which will receive 100% of their average gas consumption. Priority Sector II encompasses fertilizer plants, which are allocated 70% of their average gas consumption. Meanwhile, Priority Sector III, which includes tea industries and other industrial consumers connected to the national gas grid, will receive 80% of their average consumption. Priority Sector IV applies to industrial and commercial consumers supplied through City Gas Distribution (CGD) networks, also receiving 80% of their average consumption.
Impact on Non-Priority Sectors
To meet the requirements of these priority sectors, gas supplies may be curtailed from non-priority sectors. Oil refineries have been directed to reduce their gas consumption to approximately 65% of their past six-month average. This reduction is part of the government’s broader strategy to ensure that essential services and industries continue to operate amidst the ongoing energy crisis.
Management and Compliance
GAIL, a major player in India’s gas sector, has been tasked with managing the diversion and redistribution of natural gas under this new order. All entities involved in the natural gas supply chain are required to furnish detailed information on production, imports, stocks, allocation, and consumption to the Petroleum Planning and Analysis Cell. This oversight aims to maintain transparency and efficiency in gas distribution during these challenging times.
Government’s Commitment to Energy Security
The Indian government has emphasized its commitment to ensuring energy security for its citizens. As stated, “The government has prioritised LPG supply for households to ensure energy security for citizens amid ongoing uncertainty in the global oil and energy markets triggered by the West Asia crisis.” Additionally, non-domestic supplies from imported LPG are being prioritized for essential sectors such as hospitals and educational institutions.
The issuance of the Natural Gas (Supply Regulation) Order, 2026, reflects the Indian government’s proactive approach to managing energy resources during a period of global instability. As the situation evolves, the effectiveness of these measures will be closely monitored, and further adjustments may be necessary to address the ongoing challenges in the gas supply landscape.
