The Indian government is banking heavily on domestic refineries to tide over a severe cooking gas shortage triggered by the prolonged war in Iran, while simultaneously hunting for fresh suppliers abroad and persuading consumers to shift to alternative fuels, the Business Standard reported.
Even so, with several LPG cargoes stuck in the Persian Gulf, the country has been reportedly unable to arrange adequate supply to match pre-crisis consumption, laying bare a critical energy vulnerability, driving up prices and squeezing some consumers out of the market altogether.
Domestic output has been scaled up by more than a fifth since the strikes on Iran commenced in February, reaching roughly 46,000 tonnes a day. According to the oil ministry, this figure will climb to 50,000 tonnes once Nayara Energy Ltd’s refinery resumes operations in May after scheduled maintenance.
Refiners have also lined up around 650,000 tonnes of extra supply for May, translating to nearly 21,000 tonnes a day, including record quantities from the United States, people familiar with the matter said, requesting anonymity as the matter is not yet in the public domain.
“India has been facing challenges in LPG but the government has taken several steps,” Sujata Sharma, joint secretary in the oil ministry, said on Thursday. “Enough cargoes have been tied up.”
Despite these efforts, the total still falls short of the 100,000 tonnes that India, the world’s second-largest LPG consumer, used to burn through each day prior to the crisis.
State-run refiners have been instructed to ramp up low-margin LPG production irrespective of cost. Supplies to commercial users have been pared down to 70 per cent of usual levels to shield household consumers.
Cylinder refills are taking longer, and the government is nudging more users towards piped gas while easing pollution norms to permit coal and kerosene.
“India is likely to face tight LPG supply through May,” said Sumit Ritolia, lead analyst at Kpler, adding that imports may increasingly come from the Atlantic Basin and other non-West Asia sources, with conditions expected to stabilise from June, though at elevated prices.
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