The Centre on Saturday lifted emergency restrictions on the allocation, use and diversion of natural gas, ending controls imposed nearly four months ago after the West Asia conflict disrupted liquefied natural gas shipments through the Strait of Hormuz and forced suppliers to declare force majeure. The withdrawal, effective Saturday, removes the substantive provisions of the Natural Gas (Supply Regulation) Order issued on March 9, which empowered the government to regulate production, sector-wise allocation, distribution and consumption of natural gas, including LNG and re-gasified LNG.
Ceasefire Reopened Vital Sea Lanes
The rollback follows the resumption of shipping through the Strait of Hormuz under a ceasefire and continuing negotiations, easing concerns over supplies from West Asia.
“The ongoing conflict in the Middle East that had resulted in the disruption of liquefied natural gas shipments through the Strait of Hormuz has been subject of a ceasefire and negotiations are ongoing, as part of which, sea traffic through the Strait of Hormuz has been permitted to be resumed,” the petroleum and natural gas ministry said in a notification.
Rolling Back
India had invoked emergency powers under the Essential Commodities Act after disruptions to LNG cargoes and force majeure declarations by suppliers reduced available gas, prompting the diversion of supplies towards priority consumers.
The government had said the March intervention was necessary to ensure equitable distribution and uninterrupted availability for critical users. The original order allowed it to control natural gas supplies, acquisition and consumption and undertake sector-wise allocation during the disruption.
The July 4 amendment formally deletes these operative controls. The decision effectively ends the government-directed allocation mechanism introduced during the crisis and allows gas suppliers to move away from emergency diversion arrangements as LNG cargoes resume.
