LPG production to be enhanced; domestic, essential non-domestic sectors to be prioritised: IOCL, HPCL, BPCL

LPG shortage: Due to the geopolitical disruptions, oil marketing companies Indian Oil Corp (IOCL), Hindustan Petroleum (HPCL), and Bharat Petroleum (BPCL) issued a statement assuaging concerns about supply of LPG. They said that domestic and essential non-domestic sectors would be prioritised.

“In light of current geopolitical disruptions affecting global fuel supply, steps have been taken to enhance LPG production and prioritise its availability for domestic consumers and essential non-domestic sectors such as hospitals and educational institutions,” they said, adding that requests from other non-domestic sectors will be reviewed by a committee of Executive Directors from Oil Marketing Companies and prioritised based on merit, necessity, and product availability.

They said that for requirements that are considered as essential in other sectors, a submission can be made to the committee. “Since non-domestic LPG supply depends on the availability of imported products, the committee may not be able to address every grievance,” they said. 

This comes as the Centre revised the priority order for allocating domestically produced natural gas. On top of the list is piped cooking gas, followed by the fertiliser sector with at least 70 per cent of the demand in the past six months being met. Then comes gas supply to tea industries, manufacturing and other industrial consumers that will see 80 per cent of their past six-month average gas consumption subject being met. All city gas distribution (CGD) entities supplying gas to industrial and commercial consumers have been placed at No 4 on the priority list.

Domestic gas production will be diverted to the priority sectors by curtailing supplies.

Maritime traffic through the Strait of Hormuz has sharply declined following US-Israeli strikes inside Iran and Tehran's sweeping retaliation across the region. Insurance premiums have surged, and energy markets have shown immediate volatility.

About one-fifth of the world's seaborne oil and nearly a third of global LNG shipments pass through this narrow channel linking the Gulf to global markets. The route is vital for India's import of gas, including LNG and LPG.

Natural gas extracted from underground or seabed sources is used to generate electricity, produce fertiliser, fuel automobiles as CNG, and supply kitchens for cooking. It is also used to produce cooking gas LPG.