Mint Explainer: Can companies challenge the government’s LNG diversions in court?

On 9 March the union government issued an order under the Essential Commodities Act, 1955 that discouraged companies which receive pooled gas supplies from legally challenging its decision to divert natural gas to priority sectors.The move comes amid concerns over possible supply disruptions caused by the ongoing West Asia conflict, which has affected liquefied natural gas (LNG) shipments through the Strait of Hormuz.Mint explains what the order says, the legal basis for it, and whether courts can still entertain challenges from affected companies.The ministry of petroleum and natural gas issued the natural gas (supply regulation) order, 2026 to deal with potential LNG shortages. The order introduced a four-tier priority framework for allocating natural gas.

It gives top priority to piped natural gas (PNG) for households, CNG used for transport, LPG production, and essential pipeline operations. Fertilizer plants fall under the second-priority category, while other industrial sectors are placed lower.

To ensure adequate supply to priority sectors, the government may cut gas supplies to industries such as petrochemicals, power plants and refineries.The notification also contains a clause that requires companies receiving pooled gas to undertake that they won’t challenge the revised supply arrangement. It states: “The entities from priority sector to which the pooled gas is supplied shall give an undertaking that the pooled price is acceptable to them and they shall not make the force majeure mitigation supply subject to any litigation as this may be at variance with their existing contracts.”This effectively discourages companies that benefit from pooled gas supplies from going to court against the government’s