The Union Government’s invocation of the Essential Commodities Act (ECA), 1955, signals that the uncertainties caused by the war in West Asia has reached India too. The escalation has disrupted the global supply chain including the natural gas supply from the Persian Gulf to India. The Government has invoked the emergency powers enshrined to it by the said act to secure cooking gas to crores of households. Let’s break it down in detail to understand what the shortage means for Indians and what the latest orders from the government is.
The Essential Commodities Act (ECA) of 1955 grants Union Government the power to “regulate or prohibit the production, supply, distribution, trade, and commerce of commodities” that are declared as ‘essential’ under the Act. The schedule includes commodities such as food, fertilizers, drugs, and petroleum products. It can be modified by the Centre to add items to the list if need arises.
It is typically invoked during crisis to prevent hoarding, black marketing, price gouging and artificial shortages. With the ECA, the government can dictate production, storage, priority allocation and distribution, and fix price caps. The Act serves as a tool for the government to ensure that ordinary citizens are not cut off from basic necessities in times of crisis.
India imports more than 60% of its total LPG requirements. Almost 90% of these imports come from the Persian Gulf through the Strait of Hormuz. The ongoing US-Israel-Iran war has effectively halted vessel movements through this critical maritime chokepoint.
With only 25 to 30 days of LPG inventory available domestically, there is a threat of acute shortage of LPG cylinders in India. At this moment, there is also no clarity on when situation in the Persian Gulf and West Asia would improve. So, the government has invoked the ECA to prevent the potential shortage and the resulting hardship for domestic consumers.
The orders from the Ministry of Petroleum and Natural Gas under the ECA and the new Natural Gas (Supply Regulation) Order, 2026 gives the following directives:
With the choking at the Strait of Hormuz, India has been forced to scout for spot cargoes from distant sources such as the US, Norway and Algeria which might add to the cost. While there is no official announcements on the scale of potential shortfall, there are already reports of commercial supplies being under severe pressure in cities such as Mumbai, Bengaluru, Chennai and Pune.
While roughly 25-30 days’ stock provides a thin buffer, a longer conflict in West Asia could create considerable shortfall if supply from alternate sources are not scaled up fast enough.
As of now, the hardest hit are the hotels, restaurants, eateries, bakeries and food courts — many of which have already reported supply halts or cut down of the menu. There is also a fear of temporary shutdowns of hotels and restaurants. Other services such as gas crematoriums, laundry & ironing using gas are also reporting shortages.
The uncertainties and the shortages could skyrocket the price of LPG, affecting the domestic consumers the worst. To cushion the financial shock, the government has introduced a ‘pooled pricing’ mechanism.
GAIL (India) Ltd has been tasked with coordinating the reallocation of gas from lower-priority users to the top-priority sectors (domestic PNG, CNG, LPG plants and pipeline operations).
The Petroleum Planning & Analysis Cell (PPAC) will periodically calculate and notify a single ‘pooled price’ that averages the cost of diverted gas. The entities receiving the gas must give a legal undertaking to accept the pooled price, overriding prior contracts and pricing, to share the burden fairly.
Published on March 11, 2026
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