Govt raises non-domestic LPG allocation to 70% of pre-crisis level

The Centre increased non-domestic LPG allocation for states to 70% of pre-crisis levels, prioritizing key industries. Additionally, it slashed excise duties on petrol and diesel to shield consumers from rising global energy prices.

The secretary in the Ministry of Petroleum Neeraj Mittal on Friday wrote to all Chief Secretaries of States and Union Territories stating that several states have carried out some or all the reforms regarding the allocation of non-domestic LPG to various sectors. On March 16 the states had been allotted 40% of pre-crisis quota and another 10% was allotted based on achievement of certain reforms to promote PNG.

Govt Hikes Commercial LPG Allocation

The secretary informed that in addition to the existing 50% allocation as made earlier, an additional 20% is now proposed, that would bring the total commercial LPG allocation to 70% of the pre-crisis level of the packed non-domestic LPG.

Conditions for Additional Quota

The secretary said this additional 20% allocation shall adhere to the following stipulations: 1. 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. Among these, priority shall be given to process industries or those requiring LPG for specialised heating purposes that cannot be substituted by Natural Gas. 2. The conditions mentioned in paragraph (b) of the letter dated March 21 mentioned above regarding registration with OMCs, and in paragraph (c) regarding application for PNG to CGD entities must also be fulfilled by entities to receive LPG under this additional 20%. If industries specified in paragraph 1 of this letter where LPG is used in the process and for special purposes which cannot be substituted by Natural Gas, such requirement would stand waived.

The secretary also urged all states to avail of the 10% reform-based allocation immediately, if they have not already done so. The secretary said that with this the allocation to commercial/industrial LPG will rise to 70% (with 10% reform based) and enable relief to industrial operations in the state.

Excise Duty on Petrol, Diesel Slashed

Meanwhile, in another move to protect consumers from any spike in fuel prices due to the West Asia crisis, the government on Friday slashed excise duties for petrol and diesel bringing them down to Rs 3 per litre of petrol and zero for a litre of diesel. Windfall tax on export of diesel has been set at 21.5 rupees/litre. The reduction comes amid a global energy crisis due to the US-Israel war on Iran and the consequent Tehran-imposed blockade on the Strait of Hormuz, through which a fifth of the world's crude oil and gas supply, between 20 and 25 million barrels per day, is shipped. Before the conflict, India bought 12 to 15 per cent of that oil.

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