Govt Withdraws Emergency Gas Curbs Imposed During Hormuz Disruption as LNG Supplies Normalise

The government has withdrawn most provisions of the emergency natural gas supply regulation order imposed during the West Asia conflict after liquefied natural gas (LNG) shipments through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.

In a notification issued on Saturday, the Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) Order, 2026, omitting key operational provisions, which led to all domestically produced natural gas and imported LNG to be sold as per a new priority customer list drawn by the government.

The original order, issued on March 9 under the Essential Commodities Act, was brought in after the conflict in West Asia disrupted LNG shipments through the Strait of Hormuz, with suppliers invoking force majeure and diverting cargoes to priority consumers.

The ministry said the situation has since improved, with a ceasefire in place, negotiations underway and maritime traffic through the Strait of Hormuz resuming.

The gas supply curbs were one of three emergency measures the government introduced after energy supplies from the Gulf were threatened by the effective closure of the Strait of Hormuz, following US and Israeli strikes on Iran on February 28 and Tehran's retaliatory attacks.

The other two measures - directing refiners to maximise LPG production by diverting feedstock from petrochemicals and restricting diesel sales to bulk consumers - have already been withdrawn as the supply situation normalised.

India, the world's third-largest oil importer and consumer, imports about 88% of its crude oil requirements and around half of its natural gas needs.

About 40-45% of its crude oil imports and nearly 65% of its liquefied natural gas (LNG) supplies come from West Asia, underscoring the country's vulnerability to disruptions in the Strait of Hormuz, through which most Gulf energy exports are shipped.

The threat to traffic through the waterway prompted the government to invoke emergency powers in March to safeguard domestic fuel and gas supplies.

While India diversified crude oil purchases by sourcing supplies from other producers, natural gas imports remained exposed because most LNG cargoes from Qatar pass through the Strait of Hormuz.

The disruption led some suppliers to invoke force majeure, prompting the government to introduce emergency measures to prioritise gas supplies to essential sectors.

The March order empowered the government to direct sector-wise allocation and diversion of domestic gas, LNG and regasified LNG to ensure uninterrupted supplies to priority consumers after suppliers invoked force majeure clauses amid the West Asia crisis.

Under the emergency measures, supplies to piped natural gas (PNG) households, compressed natural gas (CNG) for transport, LPG production and pipeline operations were to be maintained at 100% of their average consumption over the previous six months.

Fertiliser plants were assured 70% of their average gas requirement, while industrial consumers connected to the national gas grid and city gas distribution networks were guaranteed 80% of their average consumption, subject to operational availability.

To meet those priorities, the government had authorised curtailment of gas supplies to petrochemical plants and power stations, while directing oil refiners to reduce gas consumption to about 65% of their average use, wherever operationally feasible.

The order had also required state-run GAIL, in coordination with the Petroleum Planning and Analysis Cell (PPAC), to pool and redistribute gas supplies, notify a pooled price for diverted gas, and oversee implementation of revised allocation schedules.

Gas producers, LNG importers, marketers, pipeline operators and city gas distributors were directed to comply with revised supply schedules, while the emergency provisions overrode existing gas sale agreements and other commercial contracts.

The government said the emergency measures were no longer required as the conflict that had disrupted LNG shipments through the Strait of Hormuz had been followed by a ceasefire, negotiations were underway, and maritime traffic through the strategic waterway had resumed.

"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 said.

Following this, the government is "omitting" parts of the March 9 emergency order that prioritised all available gas, it added.