Gas: New Regulations on Supply in India Amid West Asia Conflict

New Regulations on Gas Supply in India

On March 9, 2026, the Central Government of India took a significant step to address the ongoing disruptions in the global fuel supply chain caused by the conflict in West Asia. The government issued the Natural Gas (Supply Regulation) Order, 2026, aimed at regulating the supply of natural gas across the country. This decision comes in light of the challenges faced in liquefied natural gas (LNG) shipments, particularly through the Strait of Hormuz, where suppliers have invoked force majeure and redirected gas supplies to priority sectors.

The regulation was enacted under the Essential Commodities Act of 1955 and seeks to ensure equitable distribution of natural gas during a time of heightened uncertainty in the global oil and energy markets. The ongoing conflict has significantly impacted India’s LPG imports, prompting the government to prioritize the supply of liquefied petroleum gas (LPG) for households to maintain energy security for its citizens.

The Natural Gas (Supply Regulation) Order categorizes consumers into four priority sectors. 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, which encompasses fertilizer plants, is allocated 70% of its average gas consumption. Meanwhile, Priority Sectors III and IV, which include tea industries and other industrial consumers connected to the national gas grid, as well as industrial and commercial consumers supplied through City Gas Distribution (CGD) networks, will receive 80% of their average consumption.

In a notable directive, oil refineries have been instructed to reduce their gas consumption to approximately 65% of their average over the past six months. This measure is part of a broader strategy to ensure that gas supplies can be redirected from non-priority sectors to meet the needs of those classified as priority sectors. GAIL has been designated to manage the diversion and redistribution of natural gas under this new order, which overrides existing Gas Sale Agreements and other commercial arrangements.

All entities involved in the natural gas sector, including major players such as ONGC, Reliance Industries Limited, Oil India Limited, and Vedanta Limited, are now required to furnish detailed information regarding their production, imports, stocks, allocation, and consumption to the Petroleum Planning and Analysis Cell. This requirement aims to enhance transparency and facilitate better management of gas resources during this critical period.

The government’s decision to prioritize LPG supply for households and essential non-domestic sectors, such as hospitals and educational institutions, reflects its commitment to ensuring that basic energy needs are met despite the challenges posed by the global energy crisis. The order aims to ensure equitable distribution of gas after disruptions in LNG shipments, which have been exacerbated by the ongoing conflict.

As the situation develops, the implications of these regulations will be closely monitored by industry stakeholders and consumers alike. The measures taken by the Central Government are crucial for maintaining energy security and stability in the face of external pressures affecting the gas supply chain.