25% of India's gas needs hit by West Asia conflict: Officials
New Delhi, March 11 -- Almost a fourth of India's natural gas requirements has been impacted by force majeure conditions enforced by foreign suppliers because of the West Asia conflict and the government is procuring supplies through alternative routes to overcome the shortfall, senior officials said on Wednesday.
Nearly 50% of India's oil imports pass through the Strait of Hormuz, a crucial waterway effectively shut by Iran following the start of its conflict with Israel and the US. Fuel and gas prices have surged, heightening worries in India, which depends on imports to meet around 85% of its energy needs. "Our total consumption [of natural gas] per day currently is about 189 million metric standard cubic metres a day (MMSCMD). Out of this, around 97.5 MMSCMD is produced domestically and the rest is imported. Out of the imports, about 47.4 MMSCMD is affected due to force majeure conditions," Sujata Sharma, joint secretary in the petroleum and natural gas ministry, told a briefing on the developments in West Asia.
Natural gas is being procured through alternative routes to "offset this disruption" and two LNG cargoes procured by gas companies from new sources are on their way to India, she said.
India's crude oil supply "remains secure", Sharma said, adding that the country's daily consumption is about 5.5 million barrels. These requirements are being met by importing crude from about 40 countries. "Through diversified procurement, the volumes we have secured today exceed what would normally have arrived through the Strait of Hormuz during this period," she said.
Oil marketing companies (OMCs) have secured crude from different sources, and "as a result of this diversification, about 70% of our crude import is now coming from routes outside the Strait of Hormuz, compared with about 55% earlier", Sharma said. Two crude cargoes are expected to arrive in India within a few days, further strengthening the supply position. Refineries are operating at their highest capacity, including some at more than 100%, she said.
Sharma outlined the government's policy actions to ensure gas allocation on priority to key sectors such as households and the automobile industry by invoking the Essential Commodities Act on March 9. India imports about 60% of its liquefied petroleum gas (LPG) needs, and 90% of this comes through the Strait of Hormuz, she said.
On March 8, the government directed Indian refineries to ramp up LPG output to meet the shortfall caused by the conflict in West Asia. The measures increased domestic LPG output by 25%, helping meet household cooking gas demand, she added.
For non-domestic LPG supplies, priority is being given to hospitals and educational institutions. Sharma said a three-member committee of senior state-run OMC officials has been set up to review cooking gas allocations to restaurants, hotels and other commercial users. This panel is consulting state authorities and industry bodies to finalise a plan ensuring available LPG is distributed in a "fair and transparent" manner.
The tea industry and commercial customers connected to the gas grid will get about 80% of their average supplies over the past six months. Refineries and petrochemical units will face a reduction of about 35% so that "higher priority sectors can be protected", she said.
The government has absorbed a "significant part" of the increase in the cost of LPG to protect consumers, Sharma said. "The current price of a domestic LPG cylinder in Delhi is Rs.913 and this is after an increase of Rs.60. Without intervention, the market price would have been much higher," she said. Compensation of Rs.30,000 crore has been approved for OMCs for "under recoveries in LPG", she added.
Authorities are also taking steps to prevent "panic" buying and cooking gas hoarding, mainly triggered by misinformation, Sharma said. OMC officers and anti-adulteration cells are coordinating efforts to ensure smooth delivery....
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