- The Centre invoked the Essential Commodities Act to ensure uninterrupted LPG supply
- Oil refineries must maximize LPG production and redirect hydrocarbon streams to LPG
- India produces 12.8 million tonnes of LPG domestically, consuming 31.3 million tonnes
The Centre has invoked the Essential Commodities Act to guarantee an uninterrupted supply of domestic cooking gas. It has directed oil refineries and petrochemical units to increase production of liquefied petroleum gas to the maximum possible level and to redirect key hydrocarbon streams into the LPG pool.
The decision was taken to address potential shortages caused by developments in the Middle East. India consumed 31.3 million tonnes of LPG during the financial year 2024-25. Of this total, only 12.8 million tonnes were produced inside the country.
The remaining requirement was met through imports, with 85 to 90 per cent of those imports originating from countries such as Saudi Arabia. These shipments pass through the narrow Strait of Hormuz, a route that has now been effectively blocked. The blockage followed an escalation in the region after United States and Israeli strikes on Iran, which led Tehran to retaliate by targeting United States bases in neighbouring countries.
Under the order issued using powers from the Essential Commodities Act, all public-sector and private-sector refiners must ensure that the propane and butane streams they produce are directed entirely towards the manufacture of liquefied petroleum gas. LPG itself consists of a mixture of propane and butane. The same order requires that all LPG produced under these directions be supplied exclusively to the three public-sector oil marketing companies: Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.
Refiners have been prohibited from using propane and butane for the manufacture of petrochemicals. The LPG generated through this process must be sold only to domestic households for cooking purposes. Any violation of the order will attract penal action.
The Essential Commodities Act, 1955, appears in Schedule IX of the Constitution. Its purpose is to enable the central government to regulate the price, production, supply and distribution of, and trade and commerce in, commodities that are essential to the general public.
It received presidential assent on 1 April 1955. The Act controls the production, supply and distribution of, and trade and commerce in, certain specified goods. Powers to implement its provisions have been delegated to the states.
When the price of any essential commodity rises, the authorities can impose limits on the quantity that may be held in stock, restrict the movement of goods and require compulsory purchases under a levy system. As a result, all wholesalers, distributors and retailers must reduce their inventories to stay within the prescribed holding limits.
