With fuel shipments through the Strait of Hormuz expected to remain suspended due to the ongoing conflict in West Asia, and India facing a shortage of liquefied natural gas (LNG) reserves, the Center is tackling the situation by various possible means.
How is India tackling the LPG crisis?
Essential Commodities Act
The government on Monday invoked the Essential Commodities Act to redirect natural gas supplies to “priority sectors” that rely heavily on the fuel. India imports LNG to meet nearly half of its daily natural gas demand of about 190 million standard cubic metres.
The Natural Gas (Supply Regulation) Order, 2026, issued by the MoPNG, states that sectors affecting millions of everyday consumers, such as piped natural gas (PNG) for households, compressed natural gas (CNG) for vehicles, and natural gas used for liquefied petroleum gas (LPG) production, will be given priority over other sectors that consume natural gas.
More than 50% of these imports come from West Asian nations such as Qatar and the UAE. The country also depends on imports for around 60% of its LPG needs, with about 80% of those shipments passing through the Strait of Hormuz.
The Essential Commodities Act (ECA), enacted in 1955, was introduced to ensure the control of production, supply, distribution, and trade of certain commodities in the public interest. The law allows the government to intervene if the availability of essential goods is threatened due to practices such as hoarding or black marketing, which could disrupt people’s daily lives.
India is securing LPG from new suppliers
India is procuring additional liquefied petroleum gas (LPG) shipments from new suppliers, including the United States, Norway, Canada, and Russia, while continuing to source from available Gulf region exporters, Oil Minister Hardeep Singh Puri said on Thursday, as the world’s second-largest importer deals with constrained supplies.
The Ministry of Environment, Forest and Climate Change has advised State Pollution Control Boards to permit the use of biomass, kerosene, RDF pellets and coal as alternate fuels for the hospitality sector for a month.
Allocation of additional kerosene to states
Another 48,000 kilolitres of kerosene will be released to state governments.
The government has also raised the quarterly kerosene allocation to states from 100,000 kilolitres. “Another 48,000 kiloliters of kerosene will be released to state governments, and here, the role of state governments in terms of identification of beneficiaries and distribution will be very crucial,” said Sujata Sharma, joint secretary, marketing, the Ministry of Petroleum and Natural Gas.
Moreover, the order issued by the Ministry of Petroleum and Natural Gas (MoPNG) sets out four priority categories for the allocation of natural gas, depending on availability. These priorities are determined based on the average gas consumption of each sector over the previous six months.
The government is redirecting natural gas supplies to priority sectors that rely heavily on the fuel.
PNG used in households has been given the highest priority under this order, with domestic consumers set to receive 100% of their average consumption from the past six months. This top category also includes CNG used in the transport sector, natural gas used in LPG production, and gas required for essential pipeline operations.
(With inputs from agencies)
Key Takeaways
- The Essential Commodities Act allows the government to control essential goods during crises.
- India’s dependence on LNG imports makes it vulnerable to global supply disruptions.
- The government is exploring alternative fuel options while securing new international suppliers.
