Emergency gas curbs eased as LNG shipments normalise, Pg1

Key Highlights:

• The Union government has withdrawn most provisions of an emergency natural gas supply regulation order.
• This decision follows the normalization of Liquefied Natural Gas (LNG) shipments through the Strait of Hormuz.
• The Ministry of Petroleum and Natural Gas amended the Natural Gas (Supply Regulation) Order, 2026, which had previously prioritized gas sales.
• The original order, issued on March 9 under the Essential Commodities Act, was a response to disruptions caused by conflict in West Asia.

Detailed Insights:

• The emergency measures were enacted after a U.S.-Israeli strike on Iran in February threatened energy supplies from the Gulf.
• The Strait of Hormuz is a critical maritime chokepoint, through which 40-45% of India's crude oil and nearly 65% of its LNG supplies pass.
• The disruption led some suppliers to invoke force majeure, necessitating government intervention to safeguard domestic fuel supplies.
• Two other emergency measures, maximizing LPG production and restricting bulk diesel sales, were also withdrawn earlier.
• India is the world's third-largest oil importer and consumer, relying heavily on imports for 88% of its crude and about half of its natural gas needs.
• The government noted an improved situation with a ceasefire in place and ongoing negotiations contributing to the resumption of traffic.

Key Concepts Involved:

• Strait of Hormuz: A narrow, strategically important waterway connecting the Persian Gulf to the Arabian Sea.
• Liquefied Natural Gas (LNG): Natural gas converted to liquid form for easier storage and transport.
• Essential Commodities Act: An Indian law enacted to ensure the delivery of certain commodities or products, the supply of which, if obstructed, would affect the normal life of the people.
• Force Majeure: A common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties occurs.