Central Government invoked the Essential Commodities Act, 1955, to regulate natural gas supplies and LPG production amidst energy security concerns arising from escalating tensions in West Asia

Central Government invoked the Essential Commodities Act, 1955, to regulate natural gas supplies and LPG production amidst energy security concerns arising from escalating tensions in West Asia

Union Government invoked the Essential Commodities Act, 1955 to regulate natural gas supply and LPG production amid energy security concerns triggered by escalating tensions in West Asia.The decision was taken amid rising energy security concerns following the West Asia crisis triggered by military strikes involving Israel, the United States and Iran.The order was issued by the Ministry of Petroleum and Natural Gas and came into force with immediate effect.The government directed oil refining companies to maximise production of Liquefied Petroleum Gas and ensure adequate supply for domestic consumers.

Government Measures to Regulate Natural Gas Supply

¨     The government directed that natural gas supply should be prioritised for essential sectors to maintain energy security and supply stability.

¨     The priority sectors include domestic piped natural gas supply and compressed natural gas used in the transport sector.

¨     The priority list also includes the production of liquefied petroleum gas and the operational requirements of natural gas pipelines.

¨     The supply to these priority sectors will be maintained at one hundred percent of their past six-month average gas consumption, subject to operational availability.

¨     Fertiliser plants will receive seventy percent of their past six-month average gas consumption under the new order.

¨     The government directed public sector oil marketing companies to prioritise LPG production for domestic consumption.

¨     The companies identified in the order include Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.

¨     These companies supply cooking gas to nearly ninety nine percent of domestic households in India.

Essential Commodities Act 1955

¨     The Essential Commodities Act, 1955 empowers the government to regulate production, supply and distribution of essential commodities in the national interest.

¨     The Act is used to prevent hoarding, control prices and ensure the availability of essential goods to consumers.

¨     In 2020, the Act was amended to limit government powers to regulate certain agricultural commodities except under extraordinary circumstances.

¨     These circumstances include war, famine, extraordinary price rise and natural calamities of severe nature.