What is the Essential Commodities Act? | Explained Premium
The Hindu
Explore the Essential Commodities Act's role in addressing India's gas crisis and its impact on various sectors.
The story so far:
As the blockade of the Strait of Hormuz exposed the vulnerability of India’s supply chain for cooking gas, the majority of which is imported, the Union government invoked the Essential Commodities Act, 1955. While long-term steps are needed to diversify and reduce reliance on global suppliers and expand strategic reserves, the Act is a crucial emergency tool for now. It allows the Centre to direct refiners to boost domestic LPG production, prioritise household consumption, and regulate the allocation of natural gas.
The Act empowers the Union government to control the production, supply, and distribution of commodities, including drugs, fertilizers, foodstuffs, edible oils, fuels, and seeds.
Under Section 3, the government can issue orders to maintain or increase supplies, to prioritise production of any essential commodity, or to secure their equitable distribution and availability at fair prices. It can set prices and stock limits, prevent sales, control storage, transport, and distribution, and prevent hoarding and black marketing.
In the recent past, the law has been invoked to manage shortages of wheat, sugar, and pulses. During the COVID-19 lockdown, it was invoked to prevent hoarding, black marketing, and profiteering of a range of goods.
Facing U.S. and Israeli strikes, Iran has retaliated by attacking oil-producing neighbours in the Persian Gulf that hosted U.S. forces, and targeting ships in the Strait of Hormuz. While a fifth of the world’s oil transits through this maritime chokepoint, it is the disrupted supply of Liquefied Petroleum Gas (LPG), or cooking gas, that has sent Indian consumers into a panic.
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