The Indian government has withdrawn its March 2026 order regulating natural gas supply, as LNG shipments through the Strait of Hormuz resume following a ceasefire in West Asia, according to a gazette notification issued on July 4, 2026. The earlier order had imposed supply restrictions after the conflict disrupted LNG shipments and suppliers invoked force majeure, forcing a re-prioritisation of gas allocation to priority sectors.
Background of Supply Restrictions
The government had invoked emergency powers under the Essential Commodities Act in March 2026 after the Strait of Hormuz closure disrupted nearly half of India’s LNG consumption. "Central Government had assessed that the ongoing conflict in the Middle East had resulted in the disruption of liquefied natural gas (LNG) shipments through the SoH and suppliers had invoked force majeure clause which entailed diversion of natural gas to the priority sectors," the notification stated. To ensure equitable distribution, the government regulated production, sector-wise allocation, and diversion of natural gas supplies.
Resumption of LNG Flows
"The ongoing conflict in the Middle East that had resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz has been subject of a ceasefire and negotiations are ongoing, as part of which, sea traffic through the Strait of Hormuz has been permitted to be resumed," the notification said. The resumption of vessel transit through the Strait of Hormuz has allowed LNG cargoes to reach India again, normalising energy supplies.
India's Dependence on LNG Imports
India, the fourth-largest importer of LNG, depends heavily on overseas supplies, according to a recent Gastech report cited in the article. Qatar accounts for 41.4% of India's LNG imports. The country imported 27 million tonnes of LNG in FY25, of which 11.2 million tonnes were sourced almost entirely from Ras Laffan. The U.S. Energy Information Administration (US EIA) has said that 83% of LNG shipped through the Strait of Hormuz in 2024 went to Asian markets, with China, India, Japan, and South Korea accounting for 59% of that volume.
Broader Energy Normalization
The withdrawal of the gas order is part of a broader energy supply normalisation. Since June 29, 2026, the government has removed the cap on the sale of diesel and petrol and reduced the prices of commercial LPG, domestic ATF, and 5 kg LPG cylinders, the article noted.
Emergency Allocation During Disruption
During the disruption, the government ensured a 100% natural gas supply to domestic piped natural gas (D-PNG) consumers and compressed natural gas (CNG) for transport. The fertiliser sector allocation was initially reduced to 70%, then gradually increased to 95% in phases until the end of the crisis.
| Sector | Allocation During Crisis |
|---|---|
| Domestic PNG & CNG | 100% |
| Fertiliser | 70% initially, raised to 95% in phases |
The resumption of LNG flows and the withdrawal of restrictions will likely improve availability for industrial users and power generators, though the notification did not specify further details on any remaining curbs.
Sources:
