New Delhi. The impact of the ongoing tension in West Asia has now started reaching India’s kitchen. Amid increasing pressure on the supply of LPG (cooking gas), India has now started buying LPG from the spot market, so that there is no shortage of gas in homes and businesses. West Asia (Middle East) is the world’s largest energy supplier. But, due to the recent conflict the supply from there has been affected. In such a situation, India, which imports a major part of its requirement, is now making spot purchases to meet the immediate requirement. State-run oil companies (OMCs) are now buying additional LPG cargo from countries like the US, which is expected to reach India by June-July.
India requires about 80,000 tonnes of LPG daily. The good thing is that the country has increased its domestic production capacity. Earlier the domestic production was low, which has now increased to about 46,000 tonnes per day, which means a large part is still dependent on imports.
Earlier, about 90% of India’s LPG supply came from Gulf countries (UAE, Qatar, Saudi Arabia etc.). But, now the government has changed its strategy and increased the sources of imports. Now countries like America, Norway, Canada, Algeria and Russia have been added to this list. Earlier there was import from 10 countries, now it has been increased to 15 countries. According to the government, import of about 8 lakh tonnes of LPG has already been ensured. Recently 10 ships reached India, out of which 9 were carrying cooking gas. This shows that the government is continuously active in maintaining the supply chain.
If understood in simple language, long-term contract is based on pre-determined price and supply. In this spot purchasing, purchases are made from the market as per the immediate requirement. Right now India is making spot purchases because there has been a sudden decrease in supply. At present, the government’s focus is clear that the domestic gas supply should not be disrupted. Therefore, availability of cylinders is expected to remain intact. However, if international prices remain high for a longer period, prices may be impacted in the future.
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