The Centre has directed refiners in India to maximise the production of liquefied petroleum gas (LPG) and prioritise domestic supply in order to prevent a shortage of the cooking fuel amid supply disruptions caused by escalating tensions in West Asia.
According to an order released by the Ministry of Petroleum and Natural Gas (MoPNG), oil refiners in the country will be asked to ensure that critical gases such as propane and butane are prioritised for LPG production for households.
The Ministry has directed oil refining companies to maximise production of LPG and make the fuel available to the three state-run oil marketing companies — Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum — to be sold to consumers for domestic consumption only.
The order came in the wake of the escalating conflict in Iran and the Gulf region, which have raised concerns over potential disruptions to global energy supplies and shipping routes, including through the Strait of Hormuz, a key corridor for oil and liquefied gas trade.
The Iran war halted tanker traffic through the Strait of Hormuz and disrupted supplies from Qatar, the world’s second-largest seller of LNG.
Meanwhile, after a surge of over 15 per cent since last week when the US-Israel and Iran war began, oil prices dropped early on Friday after the US said it would allow a 30-day waiver for Indian refiners to purchase Russian oil stranded at sea.
India imports nearly 90 per cent of its oil requirement through imports.
According to data from global ship tracking firm Kpler, in February, Russia supplied 1.04 million barrels of oil per day (bpd) on an average, followed by 1 million bpd by Saudi Arabia and 980,000 bpd by Iraq.
India uses about 5.5 million barrels of crude daily, of which 1.5–2 million barrels pass through the Strait of Hormuz.
Meanwhile, a senior official has stated that India is currently placed in a comfortable position with sufficient stocks of crude oil, petroleum products such as petrol, diesel, and LPG, and the country’s oil companies are sourcing imports from countries outside the Gulf region to make up for the disruption in supplies due to the Iran war.
“Today, we have more energy sources than what is stuck in the Straits of Hormuz. We are in a comfortable position in crude oil, oil products and LPG. In terms of our current stock, we are in a comfortable position. We are going to ramp up our supplies from other parts of the geographies and make up for our supply crunch from the Straits of Hormuz,” the official said.
“India has been buying crude oil from Russia since 2022. In 2022, we were importing 0.2 per cent of total imports from Russia. In February, we imported 20 per cent of our total crude oil imports from Russia. In February, India imported 1.04 million barrels per day from Russia,” the official added.
The official further stated that news of the MRPL refinery shutdown is incorrect. MRPL Refinery is very well stocked, and all the refineries producing LPG have been directed to increase production. Currently, the country is in a comfortable position with adequate LPG stocks.
“We will also use our petchem for domestic use to meet the consumption demand,” he added.