With the war in the Middle East destabilising global energy flows, the government has invoked the Essential Commodities Act, 1955, to regulate availability, supply and equitable distribution of petroleum, petroleum products and natural gas in the country. According to a report by NDTV, the decision was taken to ensure uninterrupted supply of domestic cooking gas.
Under the order, oil refineries and petrochemical units have been directed to increase production of liquefied petroleum gas (LPG) to the maximum possible level and redirect certain hydrocarbon streams into the LPG pool.
The move comes amid concerns over potential supply disruptions caused by the US, Israel-Iran war.
Why The Government Took This Step
According to NDTV, India consumed about 31.3 million tonnes of LPG during financial year 2024-25. Out of this, 12.8 million tonnes were produced within the country, while the remaining requirement was met through imports.
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A large portion of these imports, about 85% to 90%, comes from countries such as Saudi Arabia. These shipments pass through the Strait of Hormuz, a narrow maritime route that has now been blocked owing to tensions in the Middle East.
Earlier on Monday, hotels in Mumbai, Bengaluru and Chennai wrote to the Centre saying LPG supply disruption may lead to halting restaurant and catering services.
What The Government Order Says
Under the Essential Commodities Act, both public and private sector refineries are required to ensure propane and butane streams they produce are directed completely toward manufacture of LPG.
As per the order, all the LPG produced is to be supplied only to the three public sector oil marketing companies, including Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.
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The LPG produced under this arrangement must be sold only to domestic households for cooking purposes. The order warns that any violation will attract penal action.
What Is The Essential Commodities Act, 1955?
The Essential Commodities Act (ECA) was enacted by Parliament in 1955 to ensure availability of essential goods to the public at fair prices.
The law gives the Central government the authority to regulate the production, supply and distribution of commodities that it considers essential in public interest.
Over time, the list of essential commodities has included items such as food grains, edible oils, medicines, fertilisers and petroleum products. The government can add or remove commodities from this list depending on the situation.
The law was designed mainly to prevent hoarding, profiteering and artificial shortages, particularly during situations such as wars, natural disasters or supply disruptions.
How The Act Empowers Government
One of the most important provisions of the Act is Section 3, which allows the Centre to take several steps to maintain supply and ensure fair distribution of essential commodities.
Under these powers, the government can regulate production, control the supply chain and direct distribution, including prioritising supplies for critical sectors such as defence, transport and hospitals.
The law also allows authorities to fix prices or impose price caps if market volatility affects consumer access.
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Another main power is the ability to impose stock limits on traders, wholesalers or retailers in order to prevent hoarding. When these limits are imposed, all wholesalers, distributors and retailers must reduce their inventories to stay within the prescribed holding limits.
Authorities may also require companies or distributors to release stored stocks into the market if supplies become tight.
In addition, the government can introduce licensing requirements for the storage, transport or sale of essential commodities.
Officials can inspect refineries, fuel depots and storage facilities, seize hoarded stocks and initiate legal action if supplies are diverted or rules are violated.
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