Govt sets LPG production targets for refineries amid West Asia crisis
New Delhi: The Union ministry of petroleum and natural gas has, for the first time, set cooking gas production targets for refineries in the country in the wake of the supply squeeze due to the war in West Asia.
The ministry has also directed all refiners and upstream oil companies, both public and private, to build and maintain adequate liquefied petroleum gas (LPG) storage, evacuation, and transport infrastructure, either on their own or via railways and road tankers, sufficient to meet their allocated quantities.
In a notification dated 13 August, the ministry specified maximum LPG production levels for 21 refineries and upstream companies, with a combined production potential of 63,810 tonnes per day.
“Central Government shall update the Schedule on 1 January and 1 July of every year, including updates to Liquefied Petroleum Gas production from new refineries and upstream oil companies or additional Liquefied Petroleum Gas quantities from existing refineries and upstream companies due to changes to associated infrastructure and production technology, evacuation, supply, transport or distribution of Liquefied Petroleum Gas,” said the gazette notification.
Refiners have already raised their production to 54,000 tonnes per day of LPG from the pre-war level of 36,000 tonnes, in a bid to fill the gap caused by the closure of the Strait of Hormuz.
Reliance Industries Ltd’s domestic-market-focused unit has been allocated the highest target of 18,000 tonnes of LPG production per day.
Along with the refiners, state-run exploration and production majors Oil and Natural Gas Corp. and Oil India Ltd, and the public sector gas marketing and transportation company Gail (India) Ltd, have also been asked to contribute to the country’s cooking gas production requirements.
LPG supplies were among the areas most affected by the war because India relied on West Asia for about 90% of its cooking gas imports before the conflict. Qatar, Saudi Arabia, the UAE and Kuwait were the main suppliers. During the conflict, however, the US emerged as India’s largest LPG supplier.
India imports about 65% of its annual LPG requirement of 33 million tonnes, resulting in an import bill of nearly $11 billion.
The government is also seeking to diversify household cooking energy sources by expanding the use of piped natural gas (PNG) and induction cookstoves.
The ministry recently informed Parliament that the state-run oil marketing companies (OMC) have accumulated more than ₹59,000 crore in under-recoveries from the sale of domestic cooking gas as of 31 July, up from around ₹51,000 crore at the end of June, as the war in West Asia disrupted LPG supplies and pushed up global prices.
