MARKET STRUCTURE · INDIA
OMCs allocate 20% of commercial LPG
Change
Oil marketing companies will allocate 20% of the average monthly commercial LPG requirement from today to curb hoarding and black marketing.
Why it matters
Oil marketing companies, in coordination with state governments, will allocate 20% of the average monthly commercial LPG requirement starting today. Commercial LPG is normally sold in a fully deregulated over‑the‑counter market without subsidy, registration, booking, digital authentication, or delivery confirmation. A three‑member committee from IOCL, HPCL, and BPCL was constituted on 9 March 2026 and has been meeting with state civil supply departments and restaurant associations to assess genuine needs by geography and sector. The government approved a ₹30,000 crore compensation package for OMCs to cover LPG under‑recoveries. Domestic LPG production has been increased by about 25%, with residential users and essential services prioritised over commercial consumption.
Implications
- • Commercial buyers will be limited to allocated volumes rather than unrestricted over‑the‑counter purchases.
- • State civil supply departments and OMCs must coordinate allocations and monitor distribution to prevent diversion and resale.
- • Residential users and prioritised essential services (hospitals, schools) are to receive supply ahead of commercial consumers, reducing commercial LPG availability.
- • OMCs will receive a ₹30,000 crore compensation package to cover LPG under‑recoveries tied to the allocation regime.
Who is affected
- • Oil marketing companies (OMCs)
- • State civil supply departments
- • Commercial LPG purchasers (restaurants, hotels, businesses)
- • Distribution and procurement teams at IOCL, HPCL, BPCL
What to watch
- • Allocation effective from today
Source
Topics