Domestic LPG Production and Supply Amid West Asia Crisis
Union Finance Minister Nirmala Sitharaman highlighted steps to ramp up domestic production of liquefied petroleum gas (LPG) amid disruptions due to the West Asia crisis. The government is addressing potential supply chain issues affecting fuel and fertilizers.
Efforts to Maintain LPG Supply
- India is ensuring a stable LPG supply despite reliance on imports, with 90% of the 65% imports coming via the crucial Strait of Hormuz.
- The Strait has been affected by geopolitical tensions involving the US-Israel and Iran.
- Domestic LPG production has been increased by reallocating refinery streams like propane and butane.
Monitoring and Supply Chain Adjustments
- Sujata Sharma from the petroleum ministry emphasized the ongoing monitoring of LPG supply conditions amidst the conflict.
- LPG production from refineries has surged by approximately 38% following directives to maximize output.
- The government prioritizes uninterrupted LPG supply, especially for households, hospitals, and educational institutions.
- Online LPG bookings have increased, and deliveries continue as scheduled.
LPG Consumption Trends
- There was a 17.7% decrease in LPG consumption year-on-year during the first half of March.
- Consumption dropped to 1.147 million tonnes (mt), compared to 1.387 mt in the same period last year.
- Recent LPG shipments have safely navigated the Strait of Hormuz to Indian ports.
Impact on Fertilizer Production
- Ample fertilizer availability for the Kharif season; global bidding for the Rabi crop imports to commence soon.
- Contingency plans are in place to ensure gas supply for fertilizer production.
- Government has allocated over ₹600 crore to purchase gas from spot markets if necessary.
Managing LNG Supply for Urea Plants
- Urea plants receive 65% of their LNG from long-term contracts, 15% from spot markets, and manage the remainder through operational adjustments.
- Maintenance schedules are being adapted to accommodate any potential supply disruptions.
