What is the Essential Commodities Act that India invoked to safeguard fuel amid Iran war?

MUMBAI: India has invoked the Essential Commodities Act (1955) to safeguard the nation’s energy security as the conflict involving Iran, Israel, and the US intensifies. With the Strait of Hormuz facing potential closure, the government is moving to prevent fuel shortages and stop price gouging in the domestic market. By triggering the Natural Gas (Supply Regulation) Order 2026, officials have established a strict hierarchy for gas distribution, with the primary goal of ensuring that homes and public transport do not run out of fuel, even if global supplies are choked by the war.

Under the new rules, a tiered allocation system has been mandated based on the average consumption of the past six months. Household piped gas, LPG (cooking gas), and CNG for transport have been given top priority and will receive 100 per cent of their required supply. The fertilizer sector has seen its supply cut to 70 per cent to divert resources elsewhere, while non-essential industrial units are restricted to 80 per cent of their usual intake. Additionally, refineries are now prohibited from using propane for plastic production, as these gases must be redirected to create LPG for kitchens.

Legally, the Essential Commodities Act is a crisis-era law that allows the Centre to control the production and distribution of vital goods. In this instance, it grants the government the power to set price caps and prevent traders from hoarding fuel in anticipation of higher prices. While the 2020 amendment to the Act limited government intervention in agricultural markets, it specifically retained the authority to intervene during wartime or “extraordinary circumstances.”

The ripple effects of the West Asian conflict are already being felt in major cities, with hubs like Pune and Bengaluru reporting difficulties in securing gas cylinders for commercial businesses. By invoking these emergency powers now, the government aims to stabilise the domestic market before disruptions at sea escalate into a full-scale energy crisis at home.