New Delhi: The government has invoked the Essential Commodities Act of 1955 in order to ensure the supply of natural gas amid the US-Israel-Iran war. “The supply of natural gas must be treated as priority allocation and shall be maintained subject to operational availability to one hundred per cent of their average past six-month average gas consumption,” the notification reads. India has 33.08 crore active liquefied petroleum gas (LPG) consumers, and the government is looking to maintain an uninterrupted supply.
It must be noted that India consumed 31.3 million tonnes of LPG in 2024-25, of which only 12.8 million tonnes were produced domestically, with the remainder imported. Imports have become increasingly vulnerable as 85-90 per cent come from countries like Saudi Arabia that rely on the narrow but critical Strait of Hormuz for transit.
According to a PTI report, the country has an adequate stock of crude oil (the raw material for making petrol and diesel), but as much as 30 per cent of gas supplies have been affected.
India consumes about 195 million standard cubic meters of natural gas daily for generating electricity, producing fertilisers, turning into CNG for automobiles, piping to household kitchens for cooking and use as feedstock in industries ranging from steel to ceramics. Roughly half of this is imported.
LPG under the recently signed LPG import contract with the United States have also started coming in.
Under the deal, public sector oil companies will import about 2.2 million tonnes of LPG from the US Gulf Coast in 2026 – roughly 10 per cent of the country’s annual LPG imports – in a move to diversify energy sources and bolster energy security.
While the country has an adequate stock of crude oil (the raw material for making petrol and diesel), as much as 30 per cent of gas supplies have been affected.
Impact of ECA
- 100 per cent assured supply of domestic piped gas to homes and CNG for vehicles
- 80 per cent of the previous 6-month average supply to tea industries, manufacturing, and industrial consumers connected through the natural gas grid
- 80 per cent of the previous 6-month supply to industrial and commercial natural gas consumers
- 70 per cent of the previous 6-month average supply to fertiliser plants
- Natural gas supply cut from refineries (35% cut) and petrochemicals.
- India was getting 30 per cent of its natural gas from Hormuz, and through this control order, priorities have been set for natural gas. India is purchasing natural gas from other routes to set off the short supply
What Is ECA?
The Essential Commodities Act, 1955, is an Indian law designed to ensure the availability of essential goods to consumers at fair prices by preventing hoarding, black marketing, and artificial shortages. It empowers the central government to regulate the production, supply, distribution, and pricing of items like foodstuffs, drugs, and fuel.
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