Govt Invokes ECA to Tackle LPG Crisis; Refineries Ordered to Boost Cooking Gas Output

In a major move to safeguard domestic energy security, the Government of India has officially invoked the Essential Commodities Act (ECA) to manage a deepening LPG supply crisis. The Ministry of Petroleum and Natural Gas has issued an emergency directive to all public and private refineries. They have ordered to divert key hydrocarbon streams, specifically propane and butane, exclusively toward the production of cooking gas.

The decision follows a decline in imports and rising global volatility, which has pushed the domestic supply chain to its breaking point. Under the new mandate, refineries are prohibited from using these critical "C3 and C4" streams for petrochemical manufacturing. This aims to ensure that every available molecule is channeled into the LPG pool to protect household consumers.

Under the new order, the government has prioritised gas supply to critical sectors, ensuring 100% allocation of their average consumption over the past six months, subject to operational availability. These sectors include:

• Domestic piped natural gas (PNG) supply

• Compressed natural gas (CNG) for transport

• LPG production, including shrinkage requirements

• Pipeline compressor fuel and other essential operational needs

The directive also sets specific supply thresholds for other sectors.

Gas supply to fertiliser plants will be maintained at 70% of their past six-month average consumption, while tea industries, manufacturing units, and other industrial consumers connected to the national gas grid will receive around 80% of their average gas usage, depending on operational availability.

Similarly, city gas distribution companies have been asked to ensure that industrial and commercial consumers supplied through their networks receive about 80% of their past six-month average consumption.

Hotel Industry on the Brink

The crisis has hit the commercial sector hardest. Hotel and restaurant associations across India, including AHAR and FHRAI, have reached out to the Ministry, reporting a severe shortage of commercial cylinders. In cities like Mumbai and Bengaluru, hotel owners warn that without immediate intervention, up to 20% of eateries could face temporary shutdowns by mid of the week.

To address these grievances, the government has constituted a high-level LPG Committee. This panel features Executive Directors from Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL). They are tasked with reviewing representations from hotels and essential industries to ensure that while households remain the priority, the hospitality sector does not grind to a halt.

New Restrictions for Consumers

To prevent panic-buying and hoarding, the government has also tightened domestic distribution rules. A mandatory 25-day gap between cylinder bookings has been enforced nationwide. Authorities have clarified that while there is enough stock for regular usage, the LPG Watch status is necessary to prevent artificial shortages caused by over-booking.

All states have been placed on high alert, with local administrations directed to coordinate closely with the Petroleum Ministry to monitor regional stock levels and crack down on black-marketing.

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