The Essential Commodities Act, 1955, confers power to the central government to regulate the supply, distribution and trade of petroleum and petroleum products for maintaining their supplies or for securing their equitable distribution.
In an order titled The Natural Gas (Supply Regulation) Order, 2026, the government named four sectors to which supplies would be prioritised.
The supply of natural gas to sectors including domestic piped natural gas supply, compressed natural gas for transport, LPG production including LPG shrinkage requirements and pipeline compressor fuel and other essential pipeline operational requirements shall be treated as priority allocation and shall be maintained subject to operational availability to hundred per cent of their average past six month average gas consumption.
The second priority has been accorded to the supply of natural gas for fertiliser plants that will be ensured 70 per cent of their past six months’ average gas consumption, subject to operational availability.
The third priority would be given to tea industries, manufacturing and other industrial consumers supplied through the national gas grid is maintained at eighty per cent of their past six month average gas consumption subject to operational availability.
As per the order, the fourth priority allocation would be to the industrial and commercial consumers of City Gas Distribution (CGD) entities, which will receive 80 per cent of their past six month average gas consumption.
“The gas required to meet the priorities shall be through full or partial curtailment of gas supplied in the following order of priority: Petrochemical facilities not limited to ONGC Petrol additions limited; GAIL Pata Petrochemical Complex; Reliance O2C and other high-pressure high temperature gas consumers; and power plants as required,” the order noted.
The oil refining companies shall absorb the impact of LNG supply disruption to the extent feasible by reducing gas allocation to refineries to approximately sixty-five per cent of the past six month gas consumption, subject to operational feasibility, it added.
GAIL India will manage the supplies of natural gas to implement the directions of the priority allocation, in coordination with petroleum planning and analysis cell (PPAC), for which it will submit the invoice price of every diverted volume of natural gas to PPAC, as per the order.
A pooled price shall be notified by the PPAC for the natural gas diverted from non-priority sectors to priority sectors, it said.
The entities from priority sector to whom the pooled gas is supplied shall give an undertaking that the pooled price is acceptable to them and they shall not make the force majeure mitigation supply subject to any litigation as this may be at variance with their existing contracts, the order stated.
The entities shall undertake not-to resale the diverted natural gas, it added.
All entities involved in production, import, marketing, transportation or supply of natural gas including ONGC, RIL, OIL, Vedanta and other domestic natural gas producers among others shall forthwith comply with the directions contained in the order, including revision of supply schedules, diversion of supplies and sector-wise allocation of natural gas as directed by the Central Government in coordination with the GAIL, the order stated.
