Centre Invokes Essential Commodities Act to Combat Fuel Hoarding Amid Strait of Hormuz Crisis
The Centre directed all states and Union Territories to crack down on hoarding and black marketing of petroleum products and LPG amid supply concerns triggered by the closure of the Strait of Hormuz since late February 2026.
The Ministry of Petroleum and Natural Gas invoked provisions under the Essential Commodities Act (ECA), 1955, and the LPG Control Order, asking states to conduct daily raids and inspections in coordination with oil marketing companies.
Authorities have conducted over 12,000 raids and seized more than 15,000 cylinders nationwide in enforcement drives.
The government also issued an order requiring households with both PNG (piped natural gas) and domestic LPG connections to immediately surrender their LPG connection — to ensure cylinders reach households that depend solely on LPG for cooking.
To increase domestic LPG supply, oil refineries were directed to divert hydrocarbon streams (propane, butane) toward LPG production instead of petrochemical manufacturing, boosting domestic LPG output by approximately 25%.
The government maintained that fuel supply remains stable and urged citizens not to panic-book cylinders.
Essential Commodities Act (ECA), 1955
The Essential Commodities Act, 1955 is a central legislation that empowers the government to control the production, supply, distribution, and pricing of commodities essential to public welfare. Parliament enacted it under Entry 33 of the Concurrent List (Seventh Schedule). The Act allows the government to fix stock limits (preventing hoarding), control prices, mandate requisitioning, and penalise violations. Enforcement powers can be delegated to state governments and their officers.
The current invocation of the ECA for petroleum products and LPG is exactly the kind of emergency scenario — closure of a critical global shipping route causing supply disruption — that the Act was designed for. The 2020 amendment's carve-out does not apply to petroleum products, so the Centre retains full regulatory authority.
Strait of Hormuz: Geography and Strategic Importance
The Strait of Hormuz is a narrow waterway between the Persian Gulf and the Gulf of Oman, with Iran to the north and the UAE/Oman's Musandam Peninsula to the south. It is approximately 104 km long and narrows to about 40 km at its most constrained point. The strait is the world's most critical energy chokepoint: in 2024, approximately 20 million barrels of oil per day (about 20% of global petroleum consumption) transited through it. Around 20% of globally traded LNG also passes through the strait annually.
India's LPG supply crunch is a direct consequence of the Hormuz closure — ~60% of India's LPG imports are normally sourced from Gulf producers via this route. The government's emergency measures (raids, production diversion, surrender of duplicate connections) are mitigation steps while the strait remains closed.
India's Energy Security and Import Dependence
India imports approximately 85% of its crude oil requirements and about 40-50% of its natural gas requirements. This high import dependence makes India's energy security deeply vulnerable to geopolitical disruptions in the Persian Gulf, which accounts for roughly 60-65% of India's crude oil imports. India has been pursuing energy diversification — increasing imports from Russia, the US, Africa, and Latin America — and boosting domestic oil and gas production, but these efforts have only partially reduced Gulf dependence.
India's vulnerability to the Hormuz crisis reflects the structural limits of import diversification — even with Russia supplying crude oil, LPG supply chains remain heavily concentrated in the Gulf. This event is likely to accelerate domestic production targets, strategic reserve expansion, and pipeline diplomacy with Central Asian producers.
- Strait of Hormuz closure: triggered by US-Israeli strikes on Iran, February 28, 2026
- Global oil transit through Hormuz: ~20 million barrels/day (20% of global petroleum consumption)
- India's LPG exposure: ~60% of LPG imports normally transit the strait
- LNG transit via Hormuz: ~20% of global LNG trade
- Enforcement actions: 12,000+ raids, 15,000+ cylinders seized nationwide
- Legal instruments invoked: Essential Commodities Act (1955), LPG Control Order
- Domestic LPG production boost: ~25% increase through petrochemical diversion
- Oil price impact: Brent crude surged from ~$66 to over $100/barrel within weeks of closure
- India's strategic petroleum reserves: ~5.33 million tonnes (~9-10 days of consumption)
- India's crude import dependence: ~85% of requirements are imported