Government Increases LPG Allocation to 70% for Key Industries
Govt hikes LPG allocation to 70% for pharma, food and agri sectors
Business Standard
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The Indian government has raised the liquefied petroleum gas (LPG) allocation to 70% for industrial units in the pharmaceutical, food, and agriculture sectors, capping it at 0.2 thousand tonnes per day. This move aims to support these critical industries amid rising energy demands.
- 01LPG allocation increased to 70% for specific industrial sectors.
- 02Capped at 0.2 thousand tonnes per day for each sector.
- 03Registration with state-run oil marketing companies is required.
- 04Natural gas allocation for fertiliser plants increased by 5%.
- 05Coal India Ltd has reduced reserve prices to ensure coal affordability.
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On Wednesday, the Indian government announced a significant increase in the allocation of liquefied petroleum gas (LPG) to 70% for various industrial sectors, including pharmaceuticals, food, and agriculture. This allocation is capped at 0.2 thousand tonnes per day for each sector, as stated by Neeraj Mittal, secretary of the Ministry of Petroleum and Natural Gas. Industries must register with state-run oil marketing companies to qualify for this additional allocation. Furthermore, commercial users are encouraged to apply for piped natural gas (PNG) with city gas distribution companies, although this requirement is waived for industries that rely on LPG as an essential input. In addition, the government has increased the overall natural gas allocation for fertiliser plants by 5%, reaching approximately 95% of the units' six-month average consumption. To support the petrochemical sector, the government has permitted the diversion of 800 million tonnes per day of propane and butane for petrochemical production. To enhance coal affordability, Coal India Ltd has reduced coal reserve prices by 20% and increased supply through e-auctions, with plans for additional auctions in April 2026.
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This increase in LPG allocation is expected to enhance production capabilities in the pharmaceutical, food, and agriculture sectors, potentially leading to lower costs for consumers and increased supply of essential goods.
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