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 critical 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.
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.
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Sharma said India’s crude oil supplies “remain safe,” adding that the country’s daily consumption is about 5.5 million barrels. These requirements 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 oil from various sources, “and as a result of this diversification, about 70% of our crude oil imports now come from routes outside the Strait of Hormuz, compared to about 55% previously.” Two shipments of crude oil are expected to arrive in India within a few days, further strengthening the supply situation. She added that the refineries are operating at their highest capacity, and some are operating at more than 100%.
Sharma outlined the government’s policy measures to ensure priority allocation of gas to key sectors such as households and the automobile industry by activating the Essential Commodities Act on March 9. She said that 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 added that these measures led to an increase in local liquefied petroleum gas production by 25%, which helped meet household demand for cooking gas.
As for non-domestic LPG supplies, priority is given to hospitals and educational institutions. Sharma said a three-member committee of senior officials of the state-run OMC has been formed to review cooking gas allocations to restaurants, hotels and other commercial users. This committee is consulting with state authorities and industry bodies to finalize a plan to ensure that available LPG is distributed 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. She added that refineries and petrochemical units will face a decline of about 35% so that “the highest priority sectors can be protected.”
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 $An amount of Rs 30,000 crore has been approved for OMCs “under recovery in LPG”, it added.
Authorities are also taking steps to prevent “panic” buying and hoarding of cooking gas, mainly caused by misinformation, Sharma said. OMC officers and anti-fraud cells are coordinating efforts to ensure smooth delivery.
