Gas shortage will create a situation like lockdown? Understand the whole game of demand and supply

The impact of the ongoing war in Western Asia is now gradually becoming visible on India as well. Despite all the claims being made regarding the supply of gas and oil, shortages have started appearing. In many states, work due to gas is coming to a standstill because the government has asked consumers to give priority to domestic use rather than commercial gas. The effect of this is that many factories, restaurants and even hotels are not able to get commercial gas. Hotel businessmen have even warned of stopping work. If this really happens then the situation in many metro cities may be similar to what used to happen during the lockdown. The main reason for this is that many people in these cities depend on outside food and this food is prepared using commercial gas only.

Due to shortage of gas, the work of the tiles industry has been affected, gas based crematoriums have been closed in Pune and now hotel operators have also expressed the fear of closure of work. Meanwhile, the Government of India has directed oil refineries to ensure supply of domestic demand by increasing the production of LPG. Not only this, another rule has been implemented that you can book another gas cylinder only 25 days after booking one cylinder. The government says that this step has been taken so that people cannot collect the cylinders and deposit them. Apart from this, gas supplied to hospitals and educational institutions is also being given priority.

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A committee has been formed to discuss the gas supply to the remaining domestic sector. This committee will review the gas requirements of restaurants, hotels and other industries and after that a decision will be taken. Meanwhile, Bengaluru MP Tejasvi Surya has also written a letter demanding that the concerns of hotel and restaurant operators be taken into consideration. That is, it is clear that there is a shortage of gas and if a solution is not found in the coming few days, the crisis may become serious.

Where does India’s gas come from?

In India, gas is mostly used for cooking in homes, hotel and restaurant business and in many factories. Apart from this, gas is also used for use in vehicles. Different gases are used for every work. However, India has to buy more than 60 percent of the gas it requires from other countries. In the last few years, due to schemes like Ujjwala Gas, almost every house has a gas connection and the use of gas has also increased.

If compared to the year 2012-13, the use of LPG in India had doubled in 10 years. This need is met through imports and the imports come from the Persian Gulf i.e. Arab countries. Now the Strait of Hormuz is closed, so along with other things, even gas is not able to come from there. Some gas comes out naturally with oil wells while some gas is formed while processing crude oil. That is why the government has asked refinery companies to increase gas production. Mainly it has been asked to increase the production of propane and butane. The red cylinder that comes in your house is filled with this gas.

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Apart from 60 percent import, Indian oil companies like Indian Oil, BPCL etc. together meet 40 percent LPG requirements. These companies produce gas themselves and then fill it in cylinders and deliver it to your homes.

After LPG comes Liquefied Natural Gas i.e. LNG. This is the same gas which is transported to homes through pipes. Its base part comes from other countries and half is produced in India. The part coming from other countries comes from Qatar, which means at this time there is a problem in its arrival also. 20% of LNG comes from Qatar only and Qatar has stopped producing gas. India has the capacity to store LNG but this capacity is not like that of European countries so that the work can be continued for a long time if the supply stops.

Which works are being affected?

LNG is mostly used in making ammonia and many fertilizers including urea are made from this ammonia. In many cities, LNG is used to generate electricity, run machines in factories, supply gas to urban homes and for other purposes. Prashant Vashishtha, senior vice president of rating agency IACRA, says that 30 percent of the natural gas is used in making fertilizer. He says that electricity is generated using 13 percent gas and 21 percent gas is used for domestic use. Now the matter of concern is that Zaid crops are about to be sown and fertilizer is going to be required. After this, there will be sowing of the most important paddy crop which requires more fertilizer. If fertilizer production is affected, farmers may have to face serious problems.

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More than 60 percent of the population in metro cities of India is dependent on outside food. These people eat food from small stalls, street vendors, roadside dhabas and even big hotels. All the food vendors in the cities use gas only for cooking, hence the biggest problem is going to be faced by the working class. If the supply of commercial gas reduces and food problem arises, then people will cook more food at home and this pressure may again fall on the demand for domestic gas.

Apart from these things, companies related to food processing, cement, glass, ceramic, chemical and power generation also work with the help of gas. The supply of petroleum products is also decreasing, in such a situation it can be a double blow to the businessmen of India and all the work can come to a standstill.