Nearly a quarter of India’s natural gas needs have been affected by force majeure imposed by foreign suppliers due to the conflict in West Asia, and the government is procuring supplies through alternative routes to overcome the shortage, senior officials said on Wednesday.
Nearly 50% of India’s oil imports pass through the Strait of Hormuz, a vital waterway that Iran effectively closed after the start of its conflict with Israel and the United States. Fuel and gas prices rose, raising concerns in India, which depends on imports to meet about 85% of its energy needs.
“Our total consumption [of natural gas] Currently, it is about 189 million standard cubic meters per day (MMSCMD). About 97.5 million million cubic meters of this product is produced locally and the rest is imported. “Among imports, about 47.4 million million cubic meters per day have been affected due to force majeure conditions,” Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, said at a press conference on developments in West Asia.
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She added that natural gas is being purchased through alternative methods to “compensate for this disruption,” and that two shipments of liquefied natural gas were purchased by gas companies from new sources on their way to India.
India’s crude oil supplies “remain safe,” Sharma said, adding that the country’s daily consumption is about 5.5 million barrels and the needs are met by importing crude oil from about 40 countries. “Through various purchases, the quantities we obtained today exceed what would normally have arrived through the Strait of Hormuz during this period,” she said.
Sharma said that oil marketing companies secured crude from various sources, “and as a result of this diversification, about 70% of our crude imports now come from routes outside the Strait of Hormuz, compared to about 55% previously.”
She added that two shipments of crude are expected to arrive in India within a few days, further strengthening the supply situation, while refineries are operating at peak capacity, including some at more than 100% of their capacity.
Sharma outlined the government’s policy measures to ensure priority allocation of gas to key sectors such as households and the automobile sector through the activation of the Essential Commodities Act on March 9. Regarding cooking gas or LPG supplies, she said India imports about 60% of its LPG needs, 90% of which comes through the Strait of Hormuz.
On March 8, the government directed Indian refiners to increase LPG production to meet the shortage caused by the conflict in West Asia. She said that the measures taken by the government led to an increase in domestic liquefied petroleum gas production by 25%, adding that the increased production helps meet the demand for cooking gas in homes.
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In the case of non-local supplies of LPG, priority will be given to hospitals and educational institutions. Sharma said that a three-member committee of senior officials of state-run OMC has been formed to review cooking gas allocations to restaurants, hotels and other commercial users, and that this committee is consulting state authorities and industry bodies to finalize a plan to ensure distribution of available LPG in a “fair and transparent” manner.
The tea industry and commercial customers connected to the gas grid will receive about 80% of their average supply over the past six months, and refineries and petrochemical units will face a decline of about 35% so that “higher priority sectors can be protected,” she said.
Sharma said the government had absorbed a “large portion” of the increase in the cost of LPG to protect consumers. “The current price of domestic LPG cylinder in Delhi is $913 and this is after an increase $60. Without the intervention, the market price would have been much higher $She added that an allocation of 30,000 crores had been approved for oil marketing companies due to “lack of recovery in LPG”.
Sharma said authorities are also taking steps to prevent “panic” buying and storage of cooking gas, mainly caused by misinformation, and that OMC officers and anti-fraud cells are coordinating efforts to ensure smooth delivery.
