The decision follows supply disruptions in oil and gas markets linked to the ongoing conflict involving the United States and Israel against Iran.
What is the Essential Commodities Act?
The Essential Commodities Act, 1955, empowers the Centre to control the production, supply and distribution of commodities deemed essential, to ensure availability at reasonable prices.
The law traces its origins to 1939, when key commodities were regulated under the Defence of India Act during World War II. After lapsing temporarily in 1946, similar provisions were reintroduced through the Essential Supplies (Temporary Powers) Act. Following subsequent constitutional changes, the present Essential Commodities Act came into force in 1955.
The Act allows the Centre to add new commodities to the essential list or remove them, depending on prevailing circumstances.
In 2020, Parliament amended the law to limit the Centre’s powers to impose stockholding limits on certain food items. Under the amendment, stock limits on cereals, pulses, potatoes, onions, edible oilseeds and oils can be imposed only under extraordinary circumstances such as war, famine, natural calamities or a sharp price surge.
Such limits may be triggered if there is a 100 per cent increase in the retail price of horticultural produce or a 50 per cent increase in the retail price of non-perishable food items compared to the previous 12 months or the average of the last five years, whichever is lower.
Has it been used before?
The Act has been invoked multiple times to regulate volatile commodities such as wheat, onions, potatoes and pulses.
In August 2025, the Centre imposed wheat stock limits on traders to moderate prices. Under revised norms, traders were allowed to hold up to 2,000 tonnes instead of 3,000 tonnes, retailers up to 8 tonnes per outlet instead of 10 tonnes, and large chain retailers up to 8 tonnes per outlet. The order is applicable until March 31, 2026, according to PTI.
Other recent instances include imposing stock limits during the Covid-19 pandemic in 2020, capping sugar exports and regulating tur dal prices in 2022, and setting wheat stock limits in 2023 and 2025, reported The Hindu.