Petroleum and Natural Gas Minister Murli Deora said in a statement demand for natural gas in the country is much higher than availability.

"Priority is given to supply of natural gas to gas-based power plants, which the federal government runs, however," Deora told Parliament Thursday.

He said the government was formulating a gas-utilization policy to reduce the gap between demand and supply.

He said 17.3 million standard cubic meters per day of natural gas was being supplied from the Panna-Mukta-Tapti fields. He said the government was giving priority to the fertilizer sector besides gas-based power plants from PMT fields.

India's power plants are either shut or are running at half capacity because of the gas shortage. The government has been looking to acquire oil and gas blocks in Central Asia, Latin America and Africa.