On March 10, 2023, in response to ongoing geopolitical disruptions affecting fuel supplies, the Indian government took significant action by invoking the Essential Commodities Act (ESMA Act). This decision was aimed at ensuring an uninterrupted supply of liquefied petroleum gas (LPG) for domestic use.
Government Directives
The Union Government directed refineries and petrochemical units to maximize their production of LPG. This move was crucial as it sought to address the increasing demand for cooking gas amidst the supply constraints caused by the West Asia Conflict.
In a series of orders issued by the Ministry of Petroleum and Natural Gas, the government emphasized the need for higher LPG production specifically for domestic consumption. The ministry stated, “In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use.”
Priority Allocations
To manage the distribution of natural gas effectively, the government prioritized certain sectors. Fertilizer plants were mandated to maintain seventy percent of their past six-month average gas consumption. Additionally, gas marketing entities were instructed to ensure eighty percent gas supply to tea industries and other industrial consumers.
City Gas Distribution entities were also required to provide eighty percent gas supply to industrial and commercial consumers. In contrast, oil refining companies were ordered to reduce their gas allocation to approximately sixty-five percent of their past six-month gas consumption.
Measures Against Hoarding
To prevent hoarding and black marketing, the government introduced a 25-day inter-booking period for LPG. This measure is intended to regulate the availability and equitable distribution of petroleum products and natural gas, ensuring that households receive the necessary supply of domestic LPG.
Current Situation
As of now, the government is actively monitoring the situation to ensure compliance with these directives. Every producer, importer, transporter, marketer, or distributor of natural gas is required to furnish information to the Central Government to facilitate effective oversight.
This sequence of events is crucial for maintaining energy security in India, particularly in light of the current geopolitical landscape. The invocation of the ESMA Act underscores the government’s commitment to ensuring that essential commodities like LPG remain accessible to households across the country.
