India sets LPG output targets for refiners, producers to tackle supply disruptions

In a move aimed at strengthening India's energy security and reducing the impact of disruptions in imported cooking gas supplies, the government has for the first time fixed refinery-wise and company-wise LPG production targets for public and private sector refiners as well as upstream oil and gas producers.

The Petroleum and Natural Gas Ministry, through an order, has laid down a framework under which 21 refineries and upstream companies will be required to ramp up LPG production whenever supply constraints arise.

The combined production potential under the new framework has been set at 63,810 tonnes per day, equivalent to about 70 per cent of India's daily LPG consumption and significantly higher than the country's normal domestic output.

The move comes after the recent West Asia conflict exposed India's vulnerability to imported LPG supplies.

India consumes around 33.2 million tonnes of LPG annually, or about 91,000 tonnes a day.

Of this, only 13.1 million tonnes is produced domestically, while more than 64 per cent of requirements are met through imports, most of which arrive via the Strait of Hormuz.

During the Iran-related crisis earlier this year, disruptions in shipments through the strategic waterway forced the government to take emergency measures, including directing refiners to maximise LPG production by diverting petrochemical feedstock streams.

Supplies to industrial and commercial users were also curtailed, while households were encouraged to shift to piped natural gas where available.

Although domestic LPG production was increased to nearly 55,000 tonnes per day at the peak of the crisis, those emergency directives were subsequently eased as supply conditions improved.

The new order establishes a permanent mechanism that can be activated whenever the government determines that additional LPG output is required to ensure adequate availability and fair distribution.

Under the prescribed production schedule, 18 public-sector refineries have been assigned a combined LPG production target of 31,470 tonnes per day.

Indo-Asian News Service