ESMA invoked as LPG crisis looms

The Iran war is now spreading far and wide. Its impact on the geoeconomy is now visible here in India. India imports almost 80 per cent of its gas, most of which passes through the Strait of Hormuz. With billows of barrels stuck as Iran decides to choke the oil artery of the world, the Indian kitchen is starting to face the heat. Though the crisis may not be here yet, one can see it coming should the war prolong for a month or more. With reports of LPG supply being restricted, if not completely cut, in Mumbai and Bengaluru, the fear of uncertainty is gripping people. Reportedly, even in Delhi the online gas booking lines are not working, adding to the panic. Meanwhile, the Government has invoked ESMA, a right move, to ration supply, and strict action against hoarding is a move in the right direction. India may not officially be facing a gas shortage as yet, but the warning signs of a brewing LPG crisis are everywhere. India’s deep dependence on imported liquefied petroleum gas (LPG) is beginning to expose a critical vulnerability. The government’s decision to invoke the Essential Services Maintenance Act (ESMA) to ensure uninterrupted distribution reflects the seriousness of the situation.

For India, the implications of stalled supply are severe. About 50-60 per cent of India’s crude oil imports pass through the Strait of Hormuz, making it one of the country’s most critical energy supply routes. The dependence is even higher for liquefied petroleum gas (LPG), with around 80-85 per cent of India’s LPG imports transiting through this narrow maritime corridor. India is the world’s second-largest LPG importer after China. Most of India’s oil and natural gas supplies come from Gulf nations such as Qatar, Saudi Arabia, the UAE, and Kuwait.

The most immediate impact is being felt by small businesses and the hospitality sector. If the disruption continues, temporary shutdowns could become unavoidable, adding to the losses to the economy and distress to workers who might be laid off. Reports from cities like Bengaluru and Delhi suggest that the grey market is booming, and LPG is being sold at much higher rates than its original price.

Recognising the potential fallout, the government has moved to prioritise domestic consumers and essential services. The gap between LPG cylinder bookings for households has been increased from 21 to 25 days to manage distribution.

Invoking ESMA can only offer temporary relief. The crisis highlights a deeper structural issue - India’s overwhelming dependence on imported cooking gas and its concentration of supply routes. Strategic reserves for LPG remain limited, with analysts estimating that existing stocks may cover only two to three weeks of demand. It is a wake-up call. Diversifying energy supply routes, expanding LPG storage infrastructure, and accelerating the shift to alternative cooking fuels such as piped natural gas, electric induction, and biofuels must be prioritised. The push towards renewable energy must also extend to household and commercial cooking. Every crisis offers a lesson: energy is a pillar of nation-building. Without energy self-sufficiency, no country can truly claim power and will remain vulnerable to external pressures.