The Indian government has officially rescinded most of its emergency natural gas supply regulations, which were put in place during the recent West Asia conflict. This move comes after a ceasefire was established in the region, leading to the resumption of liquefied natural gas (LNG) shipments through the critical Strait of Hormuz.
Emergency Measures No Longer Needed
In a notification issued on Saturday, the Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) Order, 2026. This amendment removes key operational provisions that had granted the government the authority to regulate the sale and allocation of both domestically produced natural gas and imported LNG under a priority customer framework.
According to the ministry, the emergency measures are no longer necessary as the conflict has eased, negotiations are underway, and maritime traffic, particularly for LNG carriers, through the Strait of Hormuz has been permitted to resume.
Context of the Original Curbs
The initial emergency order, issued on March 9 under the Essential Commodities Act, was a direct response to disruptions in LNG shipments through the Strait of Hormuz. During the conflict, several suppliers had invoked force majeure clauses, diverting cargoes and threatening India's energy security.
This gas supply restriction was one of three emergency measures implemented when energy supplies from the Gulf faced threats due to Iran's effective closure of the Strait of Hormuz. That action by Tehran followed strikes by the US and Israel on February 28. The other two measures – directing refiners to maximize LPG production and restricting diesel sales to bulk consumers – had already been withdrawn as the overall supply situation improved.
Priority Supply Framework Details
Under the now-withdrawn March order, the government had the power to direct sector-wise allocation and diversion of gas resources to ensure uninterrupted supplies for priority consumers. This included guaranteeing 100 percent of average consumption for piped natural gas (PNG) households, compressed natural gas (CNG) for transport, LPG production, and pipeline operations.
Fertilizer plants were assured 70 percent of their average gas requirement, while industrial consumers connected to national gas grids and city gas distribution networks received 80 percent, subject to operational availability. To meet these priorities, gas supplies to petrochemical plants and power stations were curtailed, and oil refiners were directed to reduce gas consumption to approximately 65 percent of their average use where feasible.
State-run GAIL, in coordination with the Petroleum Planning and Analysis Cell (PPAC), was responsible for pooling and redistributing gas supplies, notifying pooled prices, and overseeing revised allocation schedules. The emergency provisions overrode existing gas sale agreements and other commercial contracts, mandating compliance from all gas producers, importers, marketers, pipeline operators, and city gas distributors.
India's Reliance on Gulf Energy
As the world's third-largest importer and consumer of crude oil, India relies on imports for about 88 percent of its crude oil needs and approximately half of its natural gas demand. A significant portion of these imports – around 40-45 percent of crude oil and nearly 65 percent of LNG – originates from West Asia, underscoring the critical importance of the Strait of Hormuz for India's energy security.
While India diversified its crude oil purchases during the crisis by sourcing supplies from other producers, natural gas imports remained particularly vulnerable due to the fact that most LNG cargoes from Qatar, a major supplier, must pass through the Strait of Hormuz.