New Delhi, July 5: State-imposed restrictions on natural gas allocation have been dismantled by the Ministry of Petroleum and Natural Gas after commercial maritime traffic returned to the Strait of Hormuz. The regulatory rollout eliminates strict sector-wise caps that forced private and public entities to prioritize domestic distribution under government mandates. Prior to this decision, the administration had already dissolved two complementary emergency directives, which had required oil refineries to maximize liquefied petroleum gas production and restricted bulk diesel sales during the height of the geopolitical friction.
The initial regulatory clamping took effect after military strikes on February 28 caused a temporary closure of vital transit routes, creating an immediate deficit in domestic fuel availability. To insulate crucial public utilities from the supply shock, the government redirected fuel away from heavy industries to safeguard public transport networks and residential infrastructure. With commercial deliveries returning to pre-conflict baselines, the administration confirmed that normal market mechanisms have been reinstated.
“The government said these extraordinary measures were no longer necessary as the conflict that had disrupted LNG shipments through the Strait of Hormuz had eased,” a senior department representative stated during the policy roll-back announcement. He declared that domestic stockpiles have recovered to safe thresholds, rendering the emergency distribution priorities obsolete. “In view of these developments, the government said it is omitting the provisions of the March 9 emergency order that had mandated priority allocation.”
The crisis underscored the country’s strategic vulnerability to bottlenecks in the Gulf, given that nearly 40 to 45 per cent of its imported crude oil moves through the same narrow waterway. During the allocation phase, fertilizer manufacturing units were restricted to 70 per cent of their typical feedstock requirements, while general industrial plants connected to the national grid were capped at 80 per cent capacity to preserve civilian resources.
State-owned energy coordinators and the Petroleum Planning and Analysis Cell have been directed to cease their special redistribution schedules and return pricing controls to independent suppliers. Administrative supervisors asserted that contractual stability has been restored across the energy sector, ensuring that private gas firms and city distribution networks can fulfill their standard commercial obligations without state interference.
