New Delhi: The Centre Friday announced that states will receive an additional 20 percent allocation of commercial liquefied petroleum gas (LPG), raising the total supply to 70 percent of the levels before the current energy crisis caused by the war in West Asia.
However, 10 percent of this remains conditional on state efforts to promote piped natural gas (PNG) connections.
In a letter dated 27 March, Petroleum Secretary Neeraj Mittal wrote to all chief secretaries of states and Union Territories, stating, “In addition to the existing 50 percent allocation, an additional 20 percent is now proposed, that would bring the total commercial LPG allocation to 70 percent of the pre-crisis level of the packed non-domestic LPG.”
The letter further adds, “Additional allocation shall be given to industries, with priority to steel, automobile, textile, dye, chemicals, and plastics, which are labour-intensive and provide support to other essential sectors.”
According to the letter, the priority will be given to industries that rely on LPG for heating, and cannot switch to natural gas.
The move signals a gradual easing of LPG supply constraints across the country since the disruption at the Strait of Hormuz in the wake of US-Israel strikes on Iran.
A day earlier, the Centre said 8 lakh tonnes of LPG is already en route from foreign suppliers, while domestic production has risen by 40 percent and is meeting 60 percent of demand.
At an inter-ministerial press briefing Friday, Ministry of Petroleum and Natural Gas joint secretary Sujata Sharma said, “Initially, commercial LPG supplies were halted, then gradually restored with 20 percent, then an additional 10 percent based on ease of doing business for PNG expansion, later raised to 50 percent and now to 70 percent.”
She added, “The purpose of highlighting this is to make clear that India has sufficient crude, petrol, and diesel available. LPG, LNG, and PNG supplies are secure.”
Regarding commercial LPG distribution, Sharma said 30,000 tonnes were supplied between 14 March and 26 March. She also noted that government efforts to expand PNG connections have led to nearly 10,000 new connections being added daily in recent days.
On future availability, Sharma said crude supplies have been secured for the next two months, with refineries operating at full capacity and domestic LPG production up by 40 percent.
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Centre tweaks duties
On Friday, the government also announced a reduction in central excise duty on petrol and diesel by Rs 10 per litre. After the cut, the duty on petrol stands at Rs 11.90 per litre (earlier Rs 21.90), while diesel is now at Rs 7.8 per litre (earlier Rs 17.8).
At the same time, export duties were imposed in the form of Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) at Rs 21.5 per litre on diesel and Rs 29.5 per litre on aviation turbine fuel.
At the inter-ministerial briefing, Vivek Chaturvedi, the Chairman of the Central Board of Indirect Taxes and Customs (CBIC), said, “The purpose of these changes is to prioritise domestic availability of diesel and aviation turbine fuel, while ensuring energy security for the country amid global uncertainty and supply chain disruptions.”
On the duty cuts, he said they were aimed at offsetting under-recoveries of oil marketing companies and preventing a rise in retail prices of petrol and diesel.
Explaining the export duties, Chaturvedi said global crude prices have surged, incentivising refiners to export more quantities at higher prices. “As a result of the crisis, international crude prices have naturally risen sharply. This situation has created a market incentive for refineries to export at higher international prices,” he said.
He adds, “The government introduced certain export duties in the form of Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC). These duties have been imposed on the export of diesel and aviation turbine fuel.”
Chaturvedi said the export duties are expected to generate around Rs 1,500 crore in a fortnight, while the excise duty cuts will lead to a revenue loss of about Rs 7,000 crore over the same period.
Diplomatic outreach amid tensions
The briefing also touched on developments in West Asia. Randhir Jaiswal, spokesperson for the Ministry of External Affairs, provided an update on External Affairs Minister S. Jaishankar’s visit to France for the G7 foreign ministers’ meeting.
He said that on the sidelines of the meeting, Jaishankar met counterparts from France, Canada, South Korea, Japan, Brazil, the UK, Germany, and Ukraine.
“At the first session, EAM spoke on global governance reform, stressing the urgency of UN Security Council reforms, streamlining peacekeeping operations, and strengthening humanitarian supply chains,” Jaiswal said.
He added, “External Affair Minister also raised Global South concerns over energy, fertiliser, and food security arising due to West Asia conflict.”
(Edited by Ajeet Tiwari)
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