LPG Crunch: Karnataka Brings New SOPs, Makes PNG Registration Mandatory for Businesses

The Karnataka government has rolled out fresh standard operating procedures (SOPs) for commercial LPG distribution, aiming to prevent shortages and streamline supply as global disruptions linked to the West Asia crisis continue to impact availability. The new rules introduce a strict prioritisation system and push businesses towards piped natural gas (PNG) as a long-term alternative.

PNG Registration Now Mandatory Within 7 Days

Under the revised guidelines, all commercial establishments must apply for piped natural gas (PNG) connections within seven days through authorised city gas distributors wherever the network exists.

Officials have made it clear that only those businesses that register for PNG will be considered under the LPG allocation framework. Non-compliance could result in exclusion from official supply planning, effectively limiting access to commercial LPG cylinders.

This move signals a policy shift towards reducing dependence on LPG and encouraging cleaner, more stable fuel alternatives in urban and semi-urban areas.

Four-Tier Priority System for LPG Allocation

To manage limited supply, the government has divided commercial LPG consumers into four priority categories:

Priority 1 (Essential Services):
Educational institutions, student hostels, and hospitals.

Priority 2 (Public Infrastructure & Govt Services):
Government departments, public sector units, and canteens at major transport hubs such as airports, railway stations, and bus terminals.

Authorities have assured that these two categories will receive their full LPG requirement without disruption.

Priority 3 (High-Consumption Commercial Units):
Restaurants, hotels, dhabas, industrial canteens, food processing units, KMF dairies, Indira Canteens, PG accommodations, corporate kitchens, and sports facilities.

Priority 4 (Industrial & Allied Sectors):
Industries including steel, automobiles, textiles, chemicals, plastics, pharmaceuticals, agriculture, fisheries, poultry, sericulture, and others.

Supply to the third and fourth categories will be made only after fulfilling the needs of priority groups one and two. District administrations have been directed to strictly follow this hierarchy while approving allocations or addressing complaints.

Supply Still Below Normal Demand

Despite a recent increase in allocation from the Union government, supply remains below normal levels.

Karnataka's average monthly commercial LPG demand: ~25,000 tonnes
Current availability: 18,494 tonnes (about 68% of demand)

On a daily basis:

Normal demand: 850 tonnes (~44,000 cylinders of 19 kg each)
Current availability: ~29,463 cylinders per day

As per the Ministry of Petroleum and Natural Gas guidelines:

Commercial LPG supply: 578 tonnes/day
Auto LPG supply: 38.5 tonnes/day
Total LPG supply: 616.5 tonnes/day

Auto LPG will continue under existing allocations without additional restrictions.

Monitoring, Crackdown on Black Marketing

To ensure fair distribution, district-level monitoring committees led by deputy commissioners will oversee supply and take strict action against irregularities, including black marketing. Violations could lead to licence cancellations.

Food and Civil Supplies Minister K.H. Muniyappa expressed optimism, stating that the situation is expected to improve with increased central allocation and tighter monitoring.

What It Means for Businesses

The new framework is likely to significantly impact restaurants, hotels, and industrial users that depend heavily on LPG. Many establishments may now be compelled to transition to PNG, especially in cities where infrastructure is already in place.

While essential services remain protected, commercial operators in lower priority categories could face supply constraints in the short term, making fuel planning and compliance with the new rules critical.