Paper: GS – III, Subject: Economy, Topic: Economy related – Acts, Schemes, Policies, Indices, Issue: Ensuring LPG Supply.
Context:
The Government of India has invoked the Essential Commodities Act (ECA), 1955 to ensure adequate supply of Liquefied Petroleum Gas (LPG) for domestic cooking purposes.
Key Takeaways:
Government’s Emergency Directive:
Invoking the Essential Commodities Act, 1955: The government issued the order under – Section 3 of the Act
- Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999
- These provisions allow the government to regulate production, supply, and distribution of essential commodities during emergencies.
Key provisions of the Order:
- Refining companies must maximise LPG production.
- Propane and Butane streams must be used only for LPG production.
- Refiners are prohibited from diverting these streams for petrochemicals.
All LPG produced must be supplied to public sector Oil Marketing Companies (OMCs).
Key Highlights:
- The Centre has directed all oil refining companies in India to maximise the production of propane and butane streams for LPG manufacturing.
- Refiners must prioritise LPG production instead of using propane or butane for petrochemical products or other derivatives.
- Public Sector Oil Marketing Companies (OMCs) such as Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) must ensure that LPG is supplied primarily to domestic cooking gas consumers.
- Around 60% of India’s LPG demand is met through imports, mainly from Persian Gulf countries like Saudi Arabia and Qatar, while 40% is produced domestically.
- The refining process can be adjusted to increase the propane–butane output, thereby boosting LPG production.
- IOCL has issued a statement assuring consumers that India currently has adequate fuel reserves.
The Centre’s directive to maximize LPG production is a strategic response to emerging supply challenges. By invoking the Essential Commodities Act, the government aims to safeguard domestic consumers’ access to cooking gas while addressing potential disruptions in imports.
Source: (The Hindu)
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