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India Boosts LPG Output Amid Festive Demand, Gulf Supply Uncertainty
India uses a lot of cooking gas called LPG.
People usually use more LPG during the festival season before Diwali.
Indian refineries are making more LPG to prepare for this higher household demand.
India has also faced problems getting some LPG shipments from the Gulf region.
Abu Dhabi National Oil Company says it plans to deliver the LPG promised for October.
India is trying to buy more LPG from other places, including the United States.
Even so, total LPG use is expected to be about 10% lower than last year because factories have not fully resumed using it.
The government has also shortened the waiting time for rural households to refill their cylinders.
Indian refiners are increasing LPG production ahead of the festive season and continued uncertainty over Gulf supplies.
Overall LPG demand is expected to remain about 10% below last year because industrial consumption has not fully recovered.
Three September cargoes from Abu Dhabi National Oil Company could not be collected by Indian refiners.
Abu Dhabi National Oil Company says it plans to supply committed October volumes to Indian state-owned refiners.
The United States now supplies more than 20% of India’s LPG imports, up from 6% last year.
- Who
- Indian refiners, state-owned oil companies, Abu Dhabi National Oil Company, and LPG consumers.
- What
- India is increasing domestic LPG production while diversifying imports amid uncertainty over Gulf supplies.
- Where
- India, with imported supplies historically coming heavily from the Persian Gulf.
- When
- Ahead of the festive season, which continues until Diwali; the cited cylinder prices were recorded on September 23.
- Why
- To prepare for higher household demand and reduce exposure to disruptions affecting traditional Gulf supply routes.
Supply Concerns
Supply Assurance
Gulf cargo reliability
Supply Concerns
Some September LPG cargoes from Abu Dhabi National Oil Company could not be collected, showing that Gulf supply risks remain.
Supply Assurance
Abu Dhabi National Oil Company says it remains committed to meeting customers’ needs and plans to deliver committed October volumes.
Future sourcing
Supply Concerns
India’s dependence on Gulf shipments leaves it exposed to conflict and trade-related disruptions.
Supply Assurance
India is diversifying by increasing domestic production and potentially seeking United States term supplies covering up to 20% of imports next year.
Key facts
- Expected demand
- Overall LPG demand is projected to be about 10% below the same period last year.
- Refill waiting period
- The minimum rural LPG refill waiting period was reduced to 25 days from 45 days.
- Missed cargoes
- One September cargo for Bharat Petroleum Corporation and two for Indian Oil Corporation could not be collected from Abu Dhabi National Oil Company.
- Planned October cargoes
- Abu Dhabi National Oil Company indicated it plans to supply five cargoes for Indian Oil Corporation and three each for Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
- United States import share
- The United States supplied 6% of India’s LPG imports last year, but its share has since risen above 20%.
- Domestic cylinder prices
- On September 23, a 14.2-kilogram cylinder cost ₹942 in Delhi, ₹941.50 in Mumbai, and ₹968 in Kolkata.
- Commercial cylinder prices
- A 19-kilogram cylinder cost ₹2,747.50 in Delhi and Noida, ₹2,701 in Mumbai, and ₹2,996 in Hyderabad.
Quotes
ADNOC spokesperson
Spokesperson for Abu Dhabi National Oil Co. (ADNOC)
“As India’s largest LPG supplier, ADNOC remains fully committed to meeting our customers’ needs and supporting India’s energy security”
businesstoday.in
Sources
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