New Delhi, Mar 10: The government has revised the priority order for allocation of domestically produced natural gas, placing LPG production along with CNG and piped cooking gas at the top, amid disruptions in imported gas supplies caused by the escalating West Asia conflict.
According to a gazette notification, the requirements of these sectors will be fully met before gas is supplied to other sectors to ensure uninterrupted cooking fuel and transport supply.
Under the revised allocation, the fertiliser sector has been placed second, with at least 70 per cent of its average demand over the past six months to be met.
Gas supply to tea industries, manufacturing units and other industrial consumers has been placed at the third priority level, with 80 per cent of their average gas consumption over the past six months to be supplied, subject to operational availability.
All city gas distribution (CGD) entities supplying gas to industrial and commercial consumers have been placed at the fourth position in the priority list.
Domestic gas production currently meets about half of the country’s total consumption of 191 million standard cubic meters per day. The available gas will now be diverted to priority sectors by curtailing supplies to petrochemical plants, power units and other high-priced gas consumers.
The move comes after US-Israeli strikes inside Iran and Tehran’s retaliation across the region disrupted maritime traffic through the Strait of Hormuz. Insurance premiums for vessels have surged and energy markets have witnessed sharp volatility.
Nearly one-fifth of the world’s seaborne oil and almost a third of global LNG shipments pass through the Strait of Hormuz, which links the Gulf to global markets. The route is crucial for India’s imports of liquefied natural gas (LNG) and LPG.
With tanker movement affected, the government has reworked the allocation of domestically available gas to ensure uninterrupted supplies to priority segments such as household cooking and vehicular fuel.
Natural gas extracted from underground and offshore fields is used to generate electricity, produce fertilisers, convert into CNG for vehicles and supply piped cooking gas to households. It is also used in the production of LPG.
“The Central Government has assessed that the ongoing conflict in the Middle East has resulted in disruption of LNG shipments through the Strait of Hormuz and suppliers have invoked force majeure clause,” the notification said.
The order stated that the allocation revision was aimed at maintaining supplies and ensuring equitable distribution and availability of natural gas for priority sectors.
The supply of natural gas to piped natural gas for domestic cooking, compressed natural gas for transport, and LPG production — including LPG shrinkage requirements — will be treated as top priority and supplied 100 per cent of their average consumption over the past six months.
Pipeline compressor fuel and other essential operational requirements of pipelines have also been included in the priority list as pipelines cannot function without gas supply.
The government said fertiliser plants will receive 70 per cent of their average gas consumption of the past six months, subject to operational availability, and the allocated gas must be used only for fertiliser production.
Gas marketing entities have been directed to ensure that tea industries, manufacturing and other industrial consumers connected to the national gas grid receive 80 per cent of their average gas consumption over the past six months, depending on operational availability.
Similarly, CGD entities have been instructed to maintain supply to industrial and commercial consumers through their networks at 80 per cent of the past six-month average consumption.
The notification stated that gas required to meet priority sectors would be arranged through full or partial curtailment of supplies to petrochemical facilities such as ONGC Petro additions Ltd, GAIL’s Pata Petrochemical Complex, Reliance O2C and other high-pressure high-temperature gas consumers, followed by power plants if necessary.
Oil refining companies have been asked to absorb the impact of LNG supply disruptions by reducing gas allocation to refineries to about 65 per cent of their average consumption during the past six months.
State-owned gas utility GAIL has been tasked with managing the distribution of natural gas to implement the revised priority order, the notification added. (Agencies)
