The Indian government has invoked the ESMA Act to secure the supply of liquefied petroleum gas (LPG) for domestic use. This decision comes in response to recent geopolitical disruptions affecting fuel supplies.
On March 10, 2023, the Indian Union Government took significant measures to ensure the uninterrupted supply of liquefied petroleum gas (LPG) amid ongoing geopolitical disruptions affecting fuel supplies, particularly due to the West Asia Conflict.
Invocation of the ESMA Act
The government invoked the Essential Commodities Act to regulate the availability and equitable distribution of petroleum products and natural gas. This move was crucial in addressing the challenges posed by supply constraints.
Production Directives
In a bid to bolster domestic LPG production, the Ministry of Petroleum and Natural Gas issued orders directing oil refineries and petrochemical units to maximize their output specifically for domestic use. The ministry emphasized the need for higher LPG production to meet household demands.
Gas Supply Allocations
To prioritize essential sectors, the government designated natural gas supply to certain industries as a priority allocation. Fertilizer plants were mandated to maintain seventy percent of their past six-month average gas consumption, while gas marketing entities were required to ensure eighty percent gas supply to tea industries and other industrial consumers.
City Gas Distribution Requirements
City Gas Distribution entities were also instructed to maintain eighty percent gas supply to industrial and commercial consumers. Conversely, oil refining companies faced a reduction in gas allocation, limited to approximately sixty-five percent of their past six-month gas consumption.
Measures Against Hoarding
To prevent hoarding and black marketing, a 25-day inter-booking period was introduced. This measure aims to ensure that consumers have access to LPG without facing shortages or inflated prices.
Current State of Affairs
As of now, every producer, importer, transporter, marketer, or distributor of natural gas must furnish information to the Central Government, ensuring transparency and accountability in the supply chain.
Importance of the ESMA Act Invocation
The invocation of the ESMA Act is a critical step in safeguarding energy security for households across India. The government’s proactive approach reflects its commitment to addressing the challenges posed by external factors affecting fuel supplies.
Official Statement
The Ministry of Petroleum and Natural Gas stated, “In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, the Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use.” This underscores the urgency and necessity of the measures being implemented.
