New Delhi: India has loosened a month-long mandate that required all refinery byproducts to be used to make cooking gas, allowing some staples such as propane, polypropylene and butane to return to pharmaceuticals, food, distribution and petrochemicals. The decision balances the growing regional energy crisis with critical survival manufacturing sectors.
The allocation for critical sectors will be based on the recommendations of the Center for Advanced Technology, which functions under the Ministry of Petroleum and Natural Gas.
Components in the “C3 and C4” streams of petroleum refining are used in the production of liquefied petroleum gas (LPG). Amid a shortage of cooking gas supplies from West Asia due to the war, the government last month ordered that these components be diverted for LPG production only.
The April 1 order mandates that refiners maximize LPG production while providing government-regulated minimum feedstocks for critical industries.
Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas in the media on the development of war in West Asia and domestic fuel stocks said, “There are certain other industries that also need some of these molecules and that is why this decision has been taken and it will have an impact on the supply available for domestic (LPG) but it will be ensured and ensured that supply to domestic consumers is not affected.”
In addition, amid volatility in the global oil market and uncertain supply chains, India is considering expanding its strategic oil storage capacity, Sharma said.
Mint earlier reported that the war in West Asia has boosted India’s Strategic Petroleum Reserves (SPRs), with Indian Strategic Petroleum Reserve Ltd (ISPRL) submitting a Request for Proposal (RFP) for the 4 million metric tonnes (MMT) SPR in Chandikhol (Odisha) shortly before the end of April, and talks are underway to further expand the country’s strategic petroleum reserves.
Strategic capacity
India currently has a strategic reserve capacity of 5.3 million tonnes. Prime minister Narendra Modi informed the Lok Sabha on Monday that India is working on additional oil reserves of 6.5 million tonnes. The government informed Parliament last month that out of a total capacity of 5.33 million tonnes (MT) of strategic oil storage at three locations in Andhra Pradesh and Karnataka, which can act as a buffer against short-term supply shocks, about 3,372 MMT of oil storage is currently available, which is about 64% of the total storage capacity.
In a meeting with other chief secretaries and chief secretaries (food and civil supplies) of all states and Union territories on Thursday, Petroleum Minister Neeraj Mittal stressed the need to manage and prioritize LPG distribution to ensure uninterrupted supply to domestic consumers and critical industries.
Regarding the reports regarding free trade LPG (FTL) supply to migrant workers, the states have clarified that there is no disruption in LPG supply affecting the migrants and the supply remains stable, according to a statement from the petroleum ministry. The Secretary informed that states may consider managing the targeted distribution of 5 kg free trade LPG cylinders based on local requirements along with oil marketing companies. Regarding LPG for cars, the ministry said efforts are on to meet this demand and cars that can run on both LPG and petrol should be encouraged to use petrol.
