LPG supply in India: India’s Liquefied Petroleum Gas (LPG) supply is under pressure in the month of April. Compared to February, imports have almost halved. Not only this, domestic production has also declined by about 10 percent as compared to last month. The situation is becoming difficult due to the increasing tension between America and Iran. Energy shipments are being disrupted and now the supply is also decreasing.

LPG imports are decreasing

Between April 1 and April 14, India imported only 37,000 tonnes of LPG every day, which was 73,000 tonnes per day in February. Meanwhile, even though America has emerged as the largest supplier, India is still dependent on Gulf countries for more than half of its imports.

Since most of the world’s LPG is booked under long-term contracts and very little is available for immediate purchase, India is finding it difficult to increase supplies rapidly. Here the demand is increasing. Despite reports of ceasefire between America and Iran, there has been no significant help in reducing this crisis.

When will the supply be restored?

As already mentioned, India is very dependent on Western Asia for its LPG supply. This supply has been adversely affected due to the blockade of the Strait of Hormuz and attacks on Iran’s energy infrastructure in response to US-Israeli military action.

According to the Moneycontrol report, an official said on the condition of anonymity, “Based on the information received from the affected suppliers, it may take at least three years, and perhaps even longer, for the restoration of supplies.” The official pointed to India’s growing import risks and cost pressures. India’s dependence on LPG imports is still very high. About 60 percent of its total consumption is met through imports.

Before the war started in February, about 90 percent of this supply came via the Strait of Hormuz. By March 24, the share of imports from Gulf countries had declined to 55 percent, which points to both disruption in supply and changes (diversification) in sources of supply.

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