Essential Commodities Act, 1955 and Recent Invocations
Background and Current Scenario
The Indian government has invoked the Essential Commodities Act, 1955 (ESA) in response to an oil crisis triggered by geopolitical tensions. The ESA enables the regulation of production levels and supply limits of essential commodities, in this case, Liquified Petroleum Gas (LPG).
Recent Government Actions
- Effective from March 5, 2026, the order requires public Oil Marketing Companies (OMCs) such as IndianOil, Hindustan Petroleum, and Bharat Petroleum to prioritize LPG production for domestic use, utilizing Propane and Butane streams exclusively for this purpose.
- The ESA, amended in 2020, allows regulation of certain commodities only under extraordinary circumstances like war or natural disasters.
Implications
The act intends to stabilize commodity prices, prevent hoarding, and protect food security. Since 2020, it has been used selectively under stringent conditions to address specific economic and environmental challenges.