{"id":92809,"date":"2026-03-15T10:19:01","date_gmt":"2026-03-15T04:49:01","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=92809"},"modified":"2026-03-16T16:09:40","modified_gmt":"2026-03-16T10:39:40","slug":"essential-commodities-act-how-the-essential-commodities-act-controls-supply-in-emergencies","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/essential-commodities-act-how-the-essential-commodities-act-controls-supply-in-emergencies\/","title":{"rendered":"Essential Commodities Act: How the Essential Commodities Act Controls Supply in Emergencies"},"content":{"rendered":"<h2><b>Essential Commodities Act Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The blockade of the Strait of Hormuz exposed India\u2019s dependence on imported cooking gas, prompting the government to invoke the <\/span><b>Essential Commodities Act, 1955<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Act serves as an emergency measure, allowing the Centre to increase domestic LPG production, prioritise household supply, and regulate natural gas allocation while longer-term energy diversification strategies are pursued.<\/span><\/li>\n<\/ul>\n<h2><b>Key Provisions of the Essential Commodities Act<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Essential Commodities Act, 1955 empowers the Union government to <\/span><b>regulate<\/b><span style=\"font-weight: 400;\"> the production, supply, and distribution of <\/span><b>essential goods<\/b><span style=\"font-weight: 400;\"> such as <\/span><span style=\"font-weight: 400;\">foodstuffs, edible oils, fertilizers, drugs, fuels, and seeds<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Under <\/span><b>Section 3<\/b><span style=\"font-weight: 400;\"> of the Act, the government can take measures to ensure adequate supply and fair prices of essential commodities.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These include setting price controls and stock limits, regulating storage, transport, and distribution, prioritising production, and preventing hoarding and black marketing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Act has been used in the past to address shortages of commodities such as wheat, sugar, and pulses, and was also <\/span><b>invoked during the COVID-19 lockdown<\/b><span style=\"font-weight: 400;\"> to curb hoarding, black marketing, and profiteering of essential goods.<\/span><\/li>\n<\/ul>\n<h2><b>Why the Essential Commodities Act Was Invoked<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Impact of West Asia Conflict on Energy Supplies<\/b><span style=\"font-weight: 400;\"> &#8211; The ongoing conflict in West Asia, including attacks near the Strait of Hormuz, has disrupted maritime trade routes. This chokepoint handles a significant share of global energy shipments, affecting India\u2019s energy imports.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Panic Over LPG Supply<\/b><span style=\"font-weight: 400;\"> &#8211; While a large portion of global oil passes through the Strait of Hormuz, the immediate concern for India has been the disruption of Liquefied Petroleum Gas (LPG) supplies, leading to fears of shortages among consumers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Rising Domestic Demand for LPG<\/b><span style=\"font-weight: 400;\"> &#8211; Government schemes such as the <\/span><b>Pradhan Mantri Ujjwala Yojana<\/b><span style=\"font-weight: 400;\"> expanded LPG coverage from about 62% of households in 2016 to nearly universal coverage today, significantly increasing national demand.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dependence on LPG Imports<\/b><span style=\"font-weight: 400;\"> &#8211; India\u2019s domestic LPG production has not matched consumption. In 2024\u201325, refineries produced <\/span><b>12.8 million tonnes<\/b><span style=\"font-weight: 400;\">, covering only 41% of the total demand of 31.3 million tonnes, with around 90% of imports passing through the Strait of Hormuz.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>LNG Supply Dependence<\/b><span style=\"font-weight: 400;\"> &#8211; India also relies on Liquefied Natural Gas (LNG) for cooking, transportation, and commercial use. While <\/span><b>52% of LNG demand is met domestically<\/b><span style=\"font-weight: 400;\">, about 25% of consumption is imported from the Persian Gulf, highlighting India\u2019s dependence on the region.<\/span><\/li>\n<\/ul>\n<h2><b>Government Measures to Increase Domestic LPG Production<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Directive to Refineries<\/b><span style=\"font-weight: 400;\"> &#8211; The government ordered oil refineries to <\/span><span style=\"font-weight: 400;\">divert propane and butane streams to LPG production<\/span><span style=\"font-weight: 400;\">, instead of using them for petrochemical manufacturing, to boost domestic cooking gas supply.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Expansion of the Order<\/b><span style=\"font-weight: 400;\"> &#8211; A revised directive extended the order to SEZ refineries and petrochemical complexes, requiring <\/span><span style=\"font-weight: 400;\">additional hydrocarbon streams such as propylene and butene (C3 and C4 streams) to be used solely for LPG production<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Refineries Covered Under the Order<\/b><span style=\"font-weight: 400;\"> &#8211; The directive applies to state-owned refiners such as IOCL, BPCL, HPCL, ONGC, Chennai Petroleum, and Numaligarh Refinery, as well as private companies like Reliance and Nayara Energy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increase in Domestic LPG Output<\/b><span style=\"font-weight: 400;\"> &#8211; According to the government, the measure has raised domestic LPG production by about 25%, although a significant portion of demand still needs to be met through imports.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Prioritisation of Household LPG Supply<\/b><span style=\"font-weight: 400;\"> &#8211; All LPG produced under the order must be supplied to IOCL, BPCL, and HPCL, which have been instructed to prioritise domestic household consumption. As a result, reduced supply to commercial users has affected restaurants, hotels, and hostels, forcing some to limit operations.<\/span><\/li>\n<\/ul>\n<h2><b>Regulation of Natural Gas Supply Under the Government Order<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government\u2019s order introduces a priority-based allocation system for natural gas, overriding existing supply contracts to ensure essential sectors receive adequate gas during supply disruptions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Top Priority Sectors<\/b><span style=\"font-weight: 400;\"> &#8211; Highest priority is given to piped natural gas for households, compressed natural gas for transport, LPG production, and pipeline compressor fuel.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">These sectors will receive 100% of their average consumption over the past six months, subject to availability.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Supply Allocation for Fertiliser Sector<\/b><span style=\"font-weight: 400;\"> &#8211; Fertiliser manufacturers will receive around 70% of their normal gas requirement, though allocations may be adjusted if disruptions continue and agricultural demand increases during the kharif sowing season.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduced Supply for Other Industries<\/b><span style=\"font-weight: 400;\"> &#8211; Gas supplies to tea, manufacturing, and other industrial sectors have been limited to 80% of their usual demand, while oil refineries will receive only about 65% of their regular gas allocation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Curtailment for Petrochemical Facilities<\/b><span style=\"font-weight: 400;\"> &#8211; Some petrochemical plants operated by ONGC, GAIL, and Reliance may face partial or complete LNG supply cuts under the revised allocation framework.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/www.thehindu.com\/business\/Economy\/what-is-the-essential-commodities-act-explained\/article70744600.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India invoked the Essential Commodities Act during the Strait of Hormuz crisis to regulate LPG &#038; natural gas supply, ensuring fair distribution &#038; preventing hoarding.<\/p>\n","protected":false},"author":18,"featured_media":93006,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[6099,60,22,59],"class_list":{"0":"post-92809","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-essential-commodities-act","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/92809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=92809"}],"version-history":[{"count":5,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/92809\/revisions"}],"predecessor-version":[{"id":93057,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/92809\/revisions\/93057"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/93006"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=92809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=92809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=92809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}