Domestic LPG production up 38%, informs Centre

Domestic LPG production has increased 38% till date since the supply maintenance orders were issued, Union government officials said at a briefing on Tuesday.

In February, as per government data, domestic LPG production was slightly more than 1 million tonne. Normally, India’s daily LPG consumption is around 90,000 tonne on an average. Out of this, 55,000 tonnes comes from imports and 35,000 from domestic production on a proportionate basis.

A 38% increase could mean that domestic production is now more than 48,000 tonnes on a day-to-day basis. Of the total LPG consumption, some 85-90% goes into households as cooking gas, while the remaining is for commercial and industrial purposes. Curbing industrial and commercial uses would mean that the daily import requirement has come down to around 30,000 tonne from 55,000 tonne.

The cargo of Shivalik and Nanda Devi, two LPG tankers that left the Strait of Hormuz with naval escort and have currently docked in India, will be adequate for three days of imports, as opposed to two days of imports in the past.

About half a dozen LPG tankers bound for India are still in the west of Strait of Hormuz. These carry a total of some 3 lakh tonne of LPG, according to the government. The Indian LPG system works on a continuous supply cycle since there is little long-term storage. The government is working to diversify sources of LPG, too, since most of the supplies were coming from the Persian Gulf in the past. “There is no real substitute for Gulf LPG in the Indian market. While alternative supplies are available, they come with longer shipping times and cannot provide immediate relief,” said Manish Sejwal, Senior Vice President, Commodity Markets – Oil, Rystad Energy, an energy information agency based in Norway.

Qatar to west coast of India takes some four days on an LPG carrier. And a round voyage takes a little more than a week.

LPG ships are available for bringing in the fuel to India. “VLGC freight rates have not risen as sharply as those for crude or LNG carriers, partly because only about 4% of the global VLGC fleet was stranded west of Hormuz,” said Mr. Sejwal. Meanwhile, two LPG vessels of each around 24,000 to 25,000 tonnes cargo are expected to arrive at Visakhapatnam between March 26 and 30. On March 7, a 24,000-tonne LPG vessel had docked Visakhapatnam. Ennore terminal, which sees two or three LPG ship calls a month is expecting an LPG ship on March 21.

(With inputs from Saptaparno Ghosh)