Centre offers extra 10% commercial LPG to states committing to PNG shift

At least 8 oil tankers, including 7 with Russian crude, diverted mid-voyage from China to India

The government has offered states and Union Territories (UTs) an additional 10 per cent allocation of commercial liquefied petroleum gas (LPG), conditional on reforms to support the transition to piped natural gas (PNG), said Sujata Sharma, joint secretary at the Ministry of Petroleum and Natural Gas (MoPNG) on Wednesday. 

The push comes as India looks to secure fuel flows amid a tightening global market, with critical shipments snarled and supply routes shifting in real time. According to Rajesh Kumar Sinha, special secretary at the Ministry of Ports, Shipping and Waterways, one LNG tanker carrying 200,000 tonnes, six LPG carriers with 320,000 tonnes, and four crude vessels hauling 1.67 million tonnes remain stranded west of the Strait of Hormuz. 

 

Furthermore, at least seven tankers carrying Russian crude have been diverted mid-voyage from China to India to offset the disruption. Another tanker loaded with Kazakh crude is also enroute. 

The government is urging consumers to shift to PNG for cooking gas as LPG supplies tighten due to the Iran war. India depends on imports for about 60 per cent of its domestic LPG requirements, with nearly 90 per cent sourced from West Asia. 

Under the latest proposal, states will receive a 1 per cent additional allocation for setting up state- and district-level committees to approve city gas distribution (CGD) applications and address grievances, the government said in a letter dated March 18. 

A further 2 per cent will be granted for issuing orders to enable deemed CGD permissions. States can also secure an additional 3 per cent allocation by implementing a “dig and restore” scheme for CGD entities, and 4 per cent more by reducing annual rental or lease charges. 

The government had earlier requested states to facilitate CGD expansion by issuing deemed permissions for pending applications, approving new permissions within 24 hours, waiving road restoration and permission charges, relaxing working hours and seasons, and appointing State nodal officers for coordination and faster implementation. 

“States and UTs have been encouraged to take forward these reforms to accelerate CGD network expansion and expedite PNG connections for domestic, commercial and industrial consumers,” the government said. 

Meanwhile, as India engages with Iran to secure safe passage for its vessels through the Strait of Hormuz, officials are tracking a growing backlog of cargoes caught in the choke point, even as select shipments continue to push through under heightened risk. The Strait, a critical maritime chokepoint between Iran and Oman through which significant volumes of crude oil, LNG and LPG transit, has been blocked by Tehran amid US-Israeli strikes. 

As India scouts the global market to secure energy supplies, at least seven tankers carrying Russian crude, earlier destined for China, have redirected towards India since the war began in West Asia, according to a Bloomberg report citing analytics firm Vortexa Ltd. 

One such vessel, Aqua Titan, loaded with Urals crude from a Baltic port in late January, made a sharp U-turn in the South China Sea and is now headed to New Mangalore, with an expected arrival on March 21, according to ship-tracking data. The Aframax tanker had originally signalled China’s Rizhao as its destination before changing course in Southeast Asian waters in mid-March, days after Washington allowed India to temporarily ramp up purchases of Russian oil. 

Indian refiners have snapped up 30 million barrels of Russian crude in the week following the US waiver, which allows New Delhi to buy even sanctioned cargoes from Moscow. 

Separately, the Suezmax tanker Zouzou N, carrying Kazakh CPC Blend crude, is now signalling Gujarat’s Sikka as its next port of call, with an estimated arrival date of March 25. The vessel had earlier sailed from Novorossiysk in Russia’s Black Sea toward China before altering course in early March, according to ship-tracking data from Kpler. 

Also, an Indian-flagged tanker, Jag Laadki, carrying about 80,886 tonnes of crude oil, arrived at Mundra Port on Wednesday after navigating the under-attack Strait of Hormuz, news agency PTI reported. 

A day earlier, LPG carrier Nanda Devi reached Vadinar Port with 46,500 tonnes of LPG, also transiting the Strait. On Monday, another vessel, Shivalik, carrying LPG, had docked at Mundra Port. 

At the press conference with Sharma, foreign ministry spokesperson Randhir Jaiswal said India is assessing fuel-supply requests from neighbouring countries and will approve exports only if surplus volumes are available. “We have received these requests, and we are examining those requests, keeping in mind our own requirements and availability,” he said.

“Rashtrahit sarvopari (Nation First),” Sharma added. 

India, the world’s fourth-largest refiner, supplies fuels to Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives. The country has been hit hard by the jump in crude prices, but unlike China it has not moved to curb exports of refined fuels.

 

(With agency inputs)