With fuel supplies through the Strait of Hormuz expected to remain suspended due to the ongoing conflict in West Asia, and India facing shortages in liquefied natural gas (LNG) supplies, the Center is addressing the situation with various measures.
How is India handling the LPG crisis?
Basic Commodities Act
On March 9, the government invoked the Essential Commodities Act to redirect natural gas supplies to “priority sectors” that are heavily dependent on the fuel. India imports LNG to meet nearly half of its daily natural gas demand of about 190 million standard cubic meters.
The Natural Gas (Supply Regulation) 2026, issued by 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 the production of Liquefied Petroleum Gas (LPG), will be prioritized over other sectors that consume natural gas.
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More than 50% of these imports come from West Asian countries such as Qatar and the United Arab Emirates. The country also depends on imports for around 60% of its LPG needs, with around 80% of these shipments passing through the Strait of Hormuz.
Enacted in 1955, the Essential Commodities Act (ECA) was introduced to provide control over the manufacture, 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 that could disrupt people’s daily lives.
India procures LPG from new suppliers
India is procuring additional supplies of liquefied petroleum gas (LPG) from new suppliers including the United States, Norway, Canada and Russia, while continuing to supply available exporters from the Persian Gulf region, Oil Minister Hardeep Singh Puri said on Thursday (March 12th) as the world’s second largest importer deals with tight supplies.
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The Ministry of Environment, Forests and Climate Change has advised state pollution control boards to allow the use of biomass, kerosene, RDF pellets and coal as alternative fuel for hospitality for a month.
Allocation of additional kerosene to states
Another 48,000 kiloliters of kerosene will be released to state governments.
The government has also increased 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 will be very crucial in terms of beneficiary identification and distribution,” said Sujata Sharma, Joint Secretary Marketing, Ministry of Petroleum and Natural Gas.
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In addition, a regulation issued by the Ministry of Petroleum and Natural Gas (MoPNG) sets four priority categories for allocation of natural gas based on availability. These priorities are determined based on the average gas consumption of each sector over the last six months.
The government is redirecting natural gas supplies to priority sectors that are heavily dependent on the fuel.
Delhi was officially declared the country’s first kerosene-free city on 17 June 2014. The move followed an initiative launched in 2012 to replace the use of kerosene with LPG connections for households to reduce both pollution and fire hazards.
The large-scale expansion of LPG access through the Pradhan Mantri Ujjwala Yojana, which provides free connections to economically weaker households, was designed to reduce the use of firewood and coal for cooking, especially in rural areas.
However, as LPG supply is currently preferred for basic domestic cooking and for institutions such as hospitals and educational facilities, the commercial availability of LPG has been limited. This led to a temporary shift back to older and less environmentally friendly energy sources.
Domestic PNG has been given the highest priority under this contract, with domestic consumers receiving 100% of their average consumption over the last six months. This top category also includes CNG used in the transportation sector, natural gas used in LPG production, and gas needed for basic pipeline operations.
(With input from agencies)
Key things
- The Essential Commodities Act allows the government to control essential commodities 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.
