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Amid Middle East chaos, the Centre invoked the Essential Commodities Act, directing refineries to boost LPG production and prioritize domestic PNG, CNG, and pipeline operations.
Govt Invokes Essential Commodities Act Amid LPG Supply Concerns:
As the Middle East chaos has disrupted the supply of crude oil and gas, the Centre has invoked the Essential Commodities Act (EC Act), directing refineries and petrochemical units to boost production of liquefied petroleum gas (LPG) and divert key hydrocarbon streams to the LPG pool.
The highest priority will be given to domestic piped natural gas (PNG) supply, compressed natural gas (CNG) used in transport, LPG production, and essential pipeline operations. These sectors will receive gas supplies equivalent to 100% of their average consumption over the past six months, subject to operational availability.
Fertiliser plants have been classified as the second priority sector, and will receive around 70% of their average gas consumption over the past six months.
Industrial consumers, including tea industries and manufacturing units connected to the national gas grid, will be treated as the third priority sector, with supply maintained at around 80% of their recent consumption levels.
Similarly, industrial and commercial consumers supplied through city gas distribution networks will receive gas equivalent to 80% of their past consumption, depending on availability.
The Middle East crisis has entered in the third week since the killing of Iran Supreme Leader Ali Khamenei in a joint operation by US and Israel forces and followed by fuming Iran’s retaliatory ballistic and drone attacks on neighboring countries.
Several restaurants have begun reporting shortage of LPG across the country, forcing them to halt the cooking operations or be on the verge to do so.
Possible cuts for non-priority sectors
To ensure supply to priority sectors, the government has said natural gas may be diverted from lower-priority consumers, including certain petrochemical facilities and power plants if required.
Refineries may also need to absorb part of the supply shock by reducing their gas consumption to around 65% of the average levels recorded over the past six months, depending on operational feasibility.
A pooled gas pricing mechanism will also be introduced for gas diverted from non-priority sectors to priority sectors to ensure fair pricing and supply stability.
The order further states that all entities involved in the production, import, marketing, transportation and distribution of natural gas — including ONGC, Reliance Industries, Oil India, Vedanta, LNG terminal operators and city gas distribution companies — must immediately comply with the directions issued under the regulation.
The government clarified that the provisions of the order will override existing gas sale agreements and other commercial contracts, if required, to ensure uninterrupted supply to priority sectors.
Why Did Centre Invoke It At Last?
The Ministry of Petroleum and Natural Gas in the order said that the Central government has assessed that the ongoing conflict in the Middle East has resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz and suppliers have invoked force majeure clause which would entail diversion of natural gas to the priority sectors.
To manage the situation, the government has notified the Natural Gas (Supply Regulation) Order, 2026, which will allow authorities to regulate production, allocation, diversion and consumption of natural gas to maintain adequate supply and ensure equitable distribution.
March 10, 2026, 12:50 IST
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