India rolls back CNG rationing as Hormuz shipping resumes

India has rolled back emergency natural gas allocation rules introduced during the Iran war, after liquefied natural gas (LNG) shipments through the Strait of Hormuz resumed, according to a government notice (pdf). The Petroleum Ministry removed provisions that allowed it to redirect domestic gas, imported LNG, and regasified LNG toward priority sectors.

These measures were introduced in March to ration gas supplies after MENA cargoes were disrupted and suppliers invoked force majeure. The provisions were no longer needed after a ceasefire, ongoing negotiations, and the resumption of maritime traffic through the strait, the ministry said.

Why it matters: The rollback shows India’s Hormuz-linked energy shock is easing. India could tap into alternate crude suppliers during the disruption, while LNG was harder to reroute because most Qatari cargoes pass through Hormuz, which is what forced the rationing in the first place.

Who was protected: The emergency rules prioritized household piped gas, CNG for transport, and higher domestic liquefied petroleum gas (LPG) production, while fertilizer plants and industrial users were given lower supply thresholds, subject to operational availability.

Part of a wider rollback: This is the latest in a series of fuel rationing measures that India has unwound as supply risks ease. Last week, the Petroleum Ministry restored industrial and commercial LPG supplies to pre-crisis levels and withdrew sector-specific supply limits.

Keeping refinery push alive

India is continuing to expand its refining capacity as part of its energy security strategy. Prime Minister Narendra Modi inaugurated a 180k bbl / d refinery in Rajasthan, India’s first new refinery in a decade. “In the United States, not a single new refinery has been built in the past 50 years. Europe’s refinery capacity has steadily declined,” Modi said, highlighting India’s energy priorities.

The project: The INR 790 bn (USD 8.3 bn) refinery is a joint venture between state-run Indian refiner Hindustan Petroleum and the Rajasthan government. The facility is set to process around 150k bbl / d of imported crude and mainly produce diesel, gasoline, and petrochemicals.

The refinery does not reduce India’s dependence on imported crude, but it adds processing capacity at home and gives refiners more room to handle different grades of oil. That matters after the Hormuz shock, which showed that fuel security is not only about sourcing crude, but also about having enough domestic refining depth to keep supplies stable.

Capacity push: The Rajasthan project will lift India’s installed refining capacity by around 3.5% to 5.4 mn bbl / d. India is on track to expand refining capacity to 6.2 mn bbl / d by the end of the decade, according to Bloomberg.

Saudi Aramco has also been looking for a downstream foothold in India. The company was eyeing an equity slot in Bharat Petroleum’s planned USD 10.5 bn refinery-cum-petrochemicals complex near Ramayapatnam Port in Andhra Pradesh. That followed earlier talks for Aramco to acquire a 20% stake in the project, with discussions also covering a long-term crude supply agreement.