LPG Production Rise In India : The festive season is approaching in the country and demand for LPG is likely to increase during this time. On the other hand, due to the tension between the US and Iran and the ongoing situation in the Middle East, it is reported that there are still obstacles on the important sea routes including Hormuz Strait, Bab-al-Mandeb.
This situation is important for India, as the country meets a large portion of its LPG requirement through imports. If there is a disruption in LPG supply from the Gulf countries, there may be a shortage of LPG in the country during the festive period.
Keeping this situation in mind, preparations have already been started by the government. State-owned refineries have started ramping up production of LPG domestically to help meet increased demand during the festive season.
Preparation of refineries to meet local demand
According to a Bloomberg report, government-owned refineries have started ramping up production of liquid petroleum gas, or LPG, in view of the likely increase in domestic LPG demand during the festive season. Uncertainty in LPG supply from the Persian Gulf amid ongoing tensions in West Asia could pose a challenge to India’s cooking gas security. Hence the emphasis is being placed on increasing local production even before the festivities begin.
LPG production in the country increased by 20%
According to the report, domestic LPG production from state-owned refineries has increased to around 44,000 tonnes per day. This production is said to be about 20% higher than the average production in the month of August. India is gearing up for increased LPG demand during the festive period leading up to Diwali. Subsequently, as the demand for LPG is likely to increase in the winter season as well, domestic production is being increased.
Continued steps by Govt for LPG supply
Keeping in view the situation in the Middle East, the government is taking continuous measures regarding LPG supply. Prolonged obstruction of important sea lanes such as the Strait of Hormuz could affect the international movement of oil and gas. In this situation, in order to maintain the availability of LPG in India, the central government has also fixed LPG allocation for states and major industries.
According to the report, domestic refineries increased production of LPG during the war. Domestic production was subsequently curtailed in the summer as alternative supplies became available from the Americas and Africa. Now domestic LPG production is being increased once again keeping in view the increasing demand of festivals.
Waiting time for LPG refill also reduced
The minimum refill waiting time, which was implemented during the LPG supply crisis in March, has also been modified. Earlier there was a waiting period of 45 days, which has now been reduced to 25 days.
The move is aimed at maintaining the availability of LPG cylinders and ensuring that consumers do not have to wait long.
India is the second largest importer of LPG in the world
India is the second largest importer of LPG in the world. Historically India has been significantly dependent on Persian Gulf countries for LPG supply. Due to this, the ongoing conflict in the Middle East and disruptions in trade and sea routes may affect India’s LPG supply chain. The government is therefore planning to reduce the risk posed by import dependence by increasing domestic production.
What is the current LPG cylinder price?
According to the prices given in the report, a 14.2 kg domestic LPG cylinder costs ₹ 942 in Delhi, ₹ 941.50 in Mumbai and ₹ 968 in Kolkata. Domestic LPG cylinder price in Noida is ₹939.50 while in Hyderabad it is ₹994. While the price of a 19 kg commercial LPG cylinder is quoted as ₹ 2,747.50 in Delhi and ₹ 2,701 in Mumbai.
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