New Delhi: The Union Government has invoked the Essential Commodities Act, 1955 to regulate the availability, supply and distribution of petroleum, petroleum products and natural gas amid concerns over potential supply disruptions due to escalating tensions in West Asia.
The decision comes in the backdrop of developments involving Iran and the risk to global energy shipments passing through the strategically vital Strait of Hormuz, a key maritime corridor through which a significant portion of India’s energy imports move. Nearly 30 per cent of India’s natural gas supply is linked to this route, making any disruption a major concern for the country’s energy security.
The Essential Commodities Act, 1955, empowers the government to ensure uninterrupted access to critical fuel supplies, prevent hoarding and maintain equitable distribution during a period of global uncertainty. Authorities have also directed oil refineries and petrochemical units to increase the production of liquefied petroleum gas (LPG) to the maximum possible level and redirect key hydrocarbon streams into the LPG pool to strengthen domestic availability.
To protect household consumption and public transport, the government has ensured 100 per cent supply of natural gas for domestic piped gas connections and compressed natural gas (CNG) used by vehicles. This means households relying on piped gas for cooking and commuters using CNG vehicles will continue to receive an uninterrupted fuel supply despite potential shortages in the broader market.
However, restrictions have been imposed on several industrial sectors to manage available resources. Industries connected to the natural gas grid, including manufacturing units and tea processing plants, will receive only 80 per cent of their average gas supply based on consumption over the past six months. Other commercial and industrial natural gas consumers will also be limited to 80 per cent of their earlier supply levels.
Fertiliser manufacturing units will receive around 70 per cent of their previous average supply, while the most significant reduction has been imposed on refineries and petrochemical plants, where natural gas supply has been cut by about 35 per cent.
Experts say the decision reflects the government’s attempt to prioritise essential domestic consumption and stabilise the market if global energy supply chains face disruptions due to geopolitical tensions affecting shipments through the Strait of Hormuz.
The Essential Commodities Act, 1955 allows the government to regulate the production, supply and distribution of essential goods during crises to ensure their availability at fair prices and prevent black marketing or hoarding. Authorities said the latest step is a precautionary measure aimed at safeguarding consumers and maintaining energy stability in the country.
