Centre asks refiners to maximise LPG output amid West Asia conflict

The Centre has directed refiners to maximise LPG production and ensure supplies go only to state-run retailers for domestic use as tensions in West Asia threaten global energy flows

The Centre on Thursday directed refiners to maximise liquefied petroleum gas (LPG) production as disruptions to oil and gas flows persist amid the West Asian conflict, Reuters reported, citing a government order.

 

According to the order, refiners have also been asked to supply LPG only to three state-run fuel retailers — Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). The three public sector companies have also been asked to sell LPG only to domestic consumers.

 

The directive further instructs refiners not to use propane and butane, which are used to make LPG, for petrochemical production.

   

Unlike several other Asian markets where LPG is widely used as feedstock in petrochemical plants, India’s demand is driven largely by household consumption. Domestic production currently meets only about 40 per cent of the country’s total requirement. 

 

The move comes as the war involving the United States (US) and Israel against Iran entered its seventh day on Friday. Military strikes in the region have targeted critical energy infrastructure in the Gulf, including the Strait of Hormuz, a narrow sea passage that handles about 30 per cent of global crude oil trade as well as significant volumes of liquefied natural gas (LNG) and LPG. 

 

Moreover, India is the world’s second-largest LPG buyer and sources more than 90 per cent of its supply from the Middle East, according to data intelligence firm Kpler. A government official said earlier this week that India’s LPG stocks can last for nearly 30 days, reported Bloomberg.