The temporary measures were introduced following disruptions to LNG imports caused by force majeure declarations from suppliers. India, which relies heavily on imported LNG, had prioritised supplies for CNG, domestic PNG and other essential sectors.
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The government has withdrawn the March 2026 order regulating the supply of natural gas due to the conflict in West Asia, which led to the closure of the Strait of Hormuz (SoH) and impacted almost half of India’s LNG consumption.
“Central Government had assessed that the ongoing conflict in the Middle East had resulted in the disruption of liquefied natural gas (LNG) shipments through the SoH and suppliers had invoked force majeure clause which entailed diversion of natural gas to the priority sectors,” the government said in a gazette notification on Saturday (July 4, 2026).
In order to ensure equitable distribution and continued availability of natural gas for priority sectors, the government considered it necessary to regulate production, sector-wise allocation and diversion of natural gas supplies, distribution, disposal, acquisition, use or consumption, it added.
Ceasefire allows LNG shipments through Strait of Hormuz to resume
“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 of 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 said.
India depends heavily on imported LNG
According to a recent Gastech report, India, the fourth-largest importer of LNG, depends heavily on overseas supplies. Qatar accounts for 41.4 per cent of LNG imports. The country imported 27 million tonnes of LNG in FY25, of which 11.2 million tonnes were sourced almost entirely from Ras Laffan.
The US EIA has said that 83 per cent of LNG shipped through the SoH in 2024 went to Asian markets, with China, India, Japan, and South Korea accounting for 59 per cent.
Energy supply normalisation gathers pace
The action further bolsters the narrative that energy supplies are gradually picking up as vessels resume transit through the SoH. Since June 29th, the government has removed the cap on the sale of diesel and petrol and reduced the prices of commercial LPG, domestic ATF, and 5 kg LPG cylinders.
Emergency gas allocation protected priority sectors
India had invoked emergency powers under the Essential Commodities Act after disruptions in LNG supply, and the resultant force majeure by suppliers dried up cargoes, prompting a re-prioritisation of supplies for priority sectors.
The government ensured a 100 per cent natural gas supply to domestic piped natural gas (D-PNG) consumers and compressed natural gas (CNG) for transport. Fertiliser sector allocation was reduced to 70 per cent, then increased to 95 per cent in phases until the end.
Published on July 5, 2026
