India Revises Gas Allocation Amid West Asia Conflict

Amid disruptions to imported gas supplies caused by the widening West Asia conflict, India has revised its priority order for allocating domestically produced natural gas. The new policy places LPG production, CNG for transport, and piped cooking gas at the top, ensuring 100% of their average past six-month demand is met. The fertilizer sector is second, receiving at least 70% of its demand. Other industrial consumers, including tea industries and manufacturing units, will receive 80% of their average consumption, while city gas distribution entities supplying industrial and commercial consumers are at fourth priority, also receiving 80%. To meet these priorities, gas supplies will be curtailed for petrochemical facilities, power units, and high-priced gas consumers, including ONGC Petro Additions Limited and Reliance Industries. Oil refining companies are also expected to reduce gas allocation to approximately 65%. India has been tasked with managing the supply and distribution of natural gas to implement this revised order. The decision follows a sharp decline in maritime traffic through the Strait of Hormuz due to US-Israeli strikes inside Iran and Tehran's retaliation, which has led to increased insurance premiums and energy market volatility.