LPG Production Sees 10% Increase, Crude Oil Market Position Stabilizing: Government Source

LPG Production Increases by 10% Amid Global Supply Constraints

Key Figures:

• 10%: Increase in LPG production
• 60 lakhs: Number of LPG cylinders disbursed per day
• 40: Number of VLCCs (very large crude carriers) previously in shortage
• 70%: Increase in imports from non-Hormuz sources
• 31.3 million tonnes: Annual LPG consumption in India
• 87%: Percentage of LPG consumption in the domestic sector
• 62%: Percentage of LPG requirement met through imports
• $100: Oil price per barrel

Recent Developments:

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The Indian government has reported a 10% increase in LPG production following directives to boost domestic output. This move comes as a response to the ongoing global energy supply constraints due to the Iran war and the closure of the Strait of Hormuz.

Supply Chain Management:

To address supply management issues, the government has set up a committee comprising Oil Marketing Companies (OMCs) to engage with restaurants and commercial users of LPG. The committee will prioritize gas supply according to their needs.

LPG Imports:

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India's LPG imports have increased significantly, with imports from non-Hormuz sources rising to 70% in the past 10 days, up from 55%. The country has enough crude oil supply and will not halt exports of refined oil products.

Domestic LPG Consumption:

India consumes approximately 31.3 million tonnes of LPG annually, with 87% of this demand met through domestic LPG production. The remaining 13% is fulfilled through imports. The US and Israel's attack on Iran has disrupted LPG imports through the Strait of Hormuz, which accounts for 85-90% of India's LPG imports.

Government Initiatives:

The government has invoked the Essential Commodities Act (EC Act) to protect the domestic fuel market from potential disruptions. Indian Oil Corporation Limited, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation have announced steps to increase LPG output and secure adequate stocks for household consumers and essential non-domestic sectors.

Committee Formation:

A committee of three Executive Directors of Oil Marketing Companies has been formed to review representations and prioritize LPG supply to non-domestic sectors such as hospitals, educational institutions, and other commercial establishments.