Exporters seek priority fuel allocation amid LPG, gas constraints

Summary

The Federation of Indian Export Organisations (FIEO) has urged the government to prioritise export-oriented manufacturing units for LPG and natural gas supplies as disruptions linked to West Asia tighten energy availability.

NEW DELHI, March 12, 2026 — India’s exporters have asked the government to grant export-oriented units (EOUs) higher priority access to LPG and natural gas, warning that supply curbs could disrupt production and delay overseas shipments.

In a letter to the Ministry of Commerce and Industry, FIEO President S C Ralhan said the current Natural Gas (Supply Regulation) Order, 2026, which limits industrial gas supply to around 80%, could affect manufacturing output.

Push for priority status

Exporters are seeking elevation from lower-priority industrial categories to a higher tier alongside households and essential services, arguing that uninterrupted fuel supply is critical to meet global delivery schedules.

FIEO said even partial curtailment could result in missed shipping timelines, contract penalties and potential order diversion to competing markets.

Competitive concerns

Industry representatives highlighted competition from manufacturing hubs such as China, where exporters are perceived to face fewer energy disruptions.

They warned that prolonged supply uncertainty could affect India’s export momentum at a time when global demand remains uneven.

Proposed “calibrated” approach

FIEO has proposed a mechanism under which exporters with confirmed overseas orders receive assured allocations while the government continues prioritising domestic consumption.

Officials said the request will require coordination with the petroleum ministry, which is currently prioritising household LPG and critical services.

Why this matters

• Export stability: Fuel shortages risk shipment delays and lost orders.
• Industrial output: Manufacturing units depend heavily on gas-based processes.
• Policy balance: Authorities must weigh exports against domestic needs.

FAQs

Q1. What is the current allocation for manufacturers?

Under the government order, grid-connected manufacturing units are receiving about 80% of recent average consumption.

Q2. Why are exporters concerned?

Reduced supply may slow production and lead to missed delivery deadlines.

Q3. Has the government responded?

Authorities have acknowledged the request but no decision has been announced.

Q4. What are EOUs?

Export-oriented units produce primarily for overseas markets and often receive policy support.

Q5. What caused the disruption?

West Asia tensions and LNG supply constraints have tightened India’s gas availability.