Centre Raises Commercial LPG Allocation to 70% to Support Steel, Auto and Textile Industries Amid Supply Disruption

The Centre on Friday announced a major relief measure for key industrial sectors by increasing commercial LPG allocations by 20 per cent, taking the total supply to 70 per cent of pre-crisis levels. The move comes as industries across India continue to grapple with disruptions in gas supply triggered by the ongoing West Asian conflict and shipping constraints near the Strait of Hormuz.

The additional allocation is expected to provide immediate support to labour-intensive sectors such as steel, automobiles, textiles, dyes, chemicals and plastics, all of which play a crucial role in the country’s manufacturing and export ecosystem. Industry experts said the decision is aimed at ensuring production continuity and reducing supply-side stress across major industrial clusters.

According to market observers, the steel and engineering sectors are likely to be among the biggest beneficiaries. Smaller steel mills, which rely heavily on LPG for furnace operations, had been facing significant production pressure over the past few weeks. The increased supply is expected to help stabilise output and minimise bottlenecks in the manufacturing chain.

The textile sector, particularly yarn processing units in hubs such as Tiruppur, has also been severely impacted. Industry sources indicated that gas supply disruptions had affected operations for several days, placing pressure on delivery schedules, labour employment and working capital cycles. Rising freight costs and raw material prices have further added to the strain.

Manufacturers in other sectors, including consumer durables and auto components, have been exploring interim solutions such as fuel switching and renewable energy-based heating systems. However, these alternatives often come with efficiency and cost trade-offs, making reliable LPG supply critical for sustaining operations.

The government has made access to the additional allocation conditional upon industrial users registering with oil marketing companies and applying for piped natural gas connections wherever feasible. Units with specialised heating requirements where natural gas cannot serve as a substitute are expected to receive priority.

The latest move is seen as a timely intervention to cushion India’s industrial sector and maintain momentum in manufacturing activity.