New Delhi, Jul 5: The Centre has withdrawn most provisions of the emergency natural gas supply regulation order imposed during the West Asia conflict after liquefied natural gas (LNG) shipments through the Strait of Hormuz resumed following a ceasefire, easing concerns over energy security.
In a notification issued on Saturday, the Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) Order, 2026, removing key operational provisions that had enabled the government to regulate and prioritise the allocation of domestically produced natural gas and imported LNG.
The emergency order was issued on March 9 under the Essential Commodities Act after the conflict in West Asia disrupted LNG shipments through the Strait of Hormuz, with some suppliers invoking force majeure and diverting cargoes.
The ministry said the situation has improved significantly following a ceasefire in the region, ongoing negotiations and the resumption of maritime traffic through the strategic waterway.
The gas curbs were among three emergency measures introduced after energy supplies from the Gulf came under threat following US and Israeli strikes on Iran and Tehran’s retaliatory actions. The other two measures — directing refiners to maximise LPG production by diverting feedstock from petrochemical units and restricting diesel sales to bulk consumers — had already been withdrawn as supplies stabilised.
India, the world’s third-largest oil importer and consumer, imports nearly 88 per cent of its crude oil requirements and around half of its natural gas demand. Around 40-45 per cent of crude oil imports and nearly 65 per cent of LNG supplies originate from West Asia, making the country highly vulnerable to disruptions in the Strait of Hormuz.
While India was able to diversify crude oil purchases during the crisis, LNG imports remained exposed because a large share of supplies from Qatar transit through the Hormuz route. The disruption prompted the government to invoke emergency powers to protect domestic gas availability and prioritise supplies for essential sectors.
Under the March order, the government was empowered to divert domestic gas, LNG and regasified LNG to priority consumers. Supplies to piped natural gas (PNG) households, compressed natural gas (CNG) transport networks, LPG production units and pipeline operations were maintained at full average consumption levels.
Fertiliser plants were guaranteed 70 per cent of their average gas requirements, while industrial consumers connected to gas grids and city gas distribution networks were assured 80 per cent of their average demand, subject to operational availability.
To meet these priorities, gas supplies to petrochemical plants and power stations could be curtailed, while oil refiners were directed to reduce gas consumption wherever feasible. State-run GAIL, along with the Petroleum Planning and Analysis Cell (PPAC), was tasked with pooling, redistributing and pricing diverted gas supplies.
The emergency provisions also overrode existing gas sale agreements and commercial contracts, requiring producers, LNG importers, marketers, pipeline operators and city gas distributors to comply with revised allocation schedules.
Announcing the rollback, the government said the extraordinary measures were no longer necessary as LNG shipments through the Strait of Hormuz had resumed following the ceasefire and improving regional conditions.
“The ongoing conflict in the Middle East that had resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz has been subject to a ceasefire, and negotiations are ongoing, as part of which, sea traffic through the Strait of Hormuz has been permitted to be resumed,” the notification stated.
With the latest amendment, the Centre has effectively ended the emergency gas allocation regime introduced during the crisis and restored normal market-based supply arrangements. (Agencies)
