Govt Invokes Essential Commodities Act To Regulate Supply Of Petroleum, Natural Gas Amid Iran War

Last Updated:March 10, 2026, 11:56 IST

The decision was made to protect consumers from potential supply shocks linked to tensions affecting shipments through key routes such as the Strait of Hormuz.

The Government of India has invoked the Essential Commodities Act, 1955, to regulate the availability, supply and equitable distribution of petroleum, petroleum products and natural gas. The move empowers authorities to ensure uninterrupted access to critical fuel supplies, prevent hoarding and stabilise distribution amid the ongoing Iran war and supply disruptions. US-Israel-Iran War LIVE

The decision was taken to protect consumers from potential supply shocks linked to tensions affecting shipments through key routes such as the Strait of Hormuz.

The escalating war in West Asia involving Iran, Israel and the United States is beginning to have spillover effects beyond the conflict zone, with concerns emerging over its impact on India’s energy and trade flows. India relies heavily on imports to meet its liquefied petroleum gas (LPG) demand, a significant share of which comes from West Asian suppliers.

Also Read: How West Asia Tension Has Hit LPG Supply And What India Is Doing To Minimise The Impact

The Centre has sought to reassure consumers, stating that the situation is under close watch and that there is no immediate shortage.

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Addressing Parliament on Monday, External Affairs Minister S Jaishankar described the developments in West Asia as a “deep cause for concern" and said the government is closely monitoring the potential impact on global supply chains and energy markets. He noted that continued instability could disrupt trade, commercial activity and energy flows vital to India’s economy.

Also Read: LPG Price Hike Sparks Surge In Induction Cooker And Electric Appliance Sales In Kolkata

The Essential Commodities Act, 1955 was enacted by the Government of India to ensure the availability of essential goods to citizens at fair prices and to prevent hoarding, black marketing and artificial shortages. Historically, the legislation has served as a key instrument for the government to curb hoarding, manage retail inflation and safeguard national food security.

Under Section 3 of the Act, the Central Government is empowered to regulate the production, supply and distribution of essential commodities. It can impose stock limits, regulate trade practices, fix prices and restrict hoarding to maintain market stability.

Further, under Section 5, the Centre can delegate its powers under Section 3 to state governments or authorised officers, enabling quicker and more effective enforcement at the ground level.

Also Read: Trump Advisers Urge Exit Plan From Iran War Amid Fears Of Political Backlash: Report

In 2020, Parliament amended the Act to limit the Centre’s authority to regulate specific commodities, including cereals, pulses, potatoes, onions, edible oilseeds and oils, only under extraordinary circumstances such as war, famine, extraordinary price rise or a natural calamity of grave nature.

Petroleum products, including LPG, are classified as “essential commodities" under the Act. The central government has directed oil refineries to maximise LPG production and prioritise distribution to domestic households. Refineries have also been barred from diverting propane and butane streams to petrochemical production to ensure these inputs are primarily used for LPG supply.

News india Govt Invokes Essential Commodities Act To Regulate Supply Of Petroleum, Natural Gas Amid Iran War

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