India Eases Commercial LPG Access for Select Sectors Under New Caps; Mandates State Action

The Centre has permitted the supply of commercial LPG to a broader set of industrial sectors, with allocations linked to historical usage and subject to a fixed sectoral cap. As per news reports, states have been directed to implement the revised framework. 

Cap on Total Allocation 

Total supply across eligible sectors has been capped at 0.2 thousand metric tonnes (TMT) per day.  

The limit applies collectively, restricting the overall volume that can be distributed despite the expansion in coverage. 

Supply Linked to Past Consumption 

Eligible units will receive up to 70% of their bulk non-domestic LPG consumption recorded prior to March 2026.  

This benchmark will be used by states to determine allocations for individual industrial units. 

Expanded List of Eligible Sectors 

The directive covers sectors such as polymers, agriculture, packaging, paints, steel, metals and glass.  

The list has been extended to include pharmaceuticals, food processing, seed production, ceramics, foundries, forging units, aerosol manufacturing, as well as uranium and heavy water facilities. 

All included sectors will be subject to the same 70% allocation rule and the overall sectoral cap. 

Priority for Process-Specific Use 

The government has indicated that priority should be given to units where LPG is required for specific industrial processes and cannot be substituted with alternatives such as natural gas.  

This applies particularly to operations dependent on LPG’s combustion or chemical properties. 

Role of State Authorities 

State Governments have been tasked with operationalising the allocation system. This includes verifying past consumption data, identifying eligible units, and ensuring that the sectoral cap is not exceeded during distribution. 

Read More: India’s E-commerce Market Could Reach $250 Billion by 2030 Amid Changing Consumer Behaviour! 

Conclusion 

The revised approach increases access to commercial LPG for industrial users while retaining a controlled supply structure based on past consumption and defined limits. 

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