Is India really facing an LPG shortage? This is what expert says

The common man’s panic in times of war is not new. Whenever such a crisis emerges, disruption of supply chains triggers fear among people. Incidents such as panic-buying become rampant, as it has already been seen at fuel stations across the country, as the war between Israel-US and Iran intensifies in West Asia.

Also read: How Asian economies are coping with energy crisis amid Iran war

However, more than fuel, what has been affected more by the conflict is liquefied petroleum gas (LPG), mostly used as cooking gas, which India imports in large quantities from various countries in West Asia.

India ramps up LPG production at home, hikes prices

The closure of the geo-economically key Strait of Hormuz by Iran in retaliation for the joint attacks has choked the trade, forcing India to ask its refiners to boost LPG production at home and also increase its prices, for the first time in about a year. The hike in prices has come between Rs 60 a cylinder (household usage) and Rs 115 a cylinder (commercial usage).

These steps by the government have left the common man worried too, and the general perception is that there is a serious shortage of gas supply in the country, and the government is rationing it to deal with the situation. Social media is flooded with such apprehensions. While the government tried to downplay the increase as a nominal one and said there was no plan to hike prices of key fuel such petrol and diesel, not many were convinced.

Also read: Iran war puts USD 11.8 bn worth of India's farm exports at risk: GTRI

But is there really a shortage of LPG in the country at the moment?

Authorities are ruling out that there is a scarcity and call such reports misleading.

Is India facing a gas scarcity? Expert clarifies

Chandra Prakash, president of All India LPG Distributors Federation, said the rise in the price of LPG cylinders was due to conditions that prevailed in the international market.

According to him, “LPG rates in India have been determined based on the Import Parity Rate for the past 12-15 years. Oil companies have taken this step due to a sudden surge in gas prices in the international market.

“Domestic cylinder prices have been increased after a long time, while commercial cylinder prices fluctuate monthly based on market conditions. The ongoing tensions in the Gulf countries have created pressure on the global energy sector, which has also affected Indian rates.”

On the reports of LPG shortage in the country, Prakash said it was not true.

He said all registered customers, whether under the Ujjwala Yojana or otherwise, will continue to receive gas smoothly.

Also read: Will petrol and diesel prices rise after LPG hike amid global crude oil surge?

“While there have been some disruptions in the supply chain, the government has strictly asked refineries to increase production. It has also ensured that the three state-owned oil companies and private companies prioritise domestic supply. Consumers have been advised against panic booking. Stocks are fully under control, and alternative arrangements are being made to streamline the supply chain,” he told The Federal.

The LPG distributors’ body chief further said that while there has been no plan by the government to ration cooking gas, some precautionary measures have been taken.

'Can book cylinder only after 25 days'

“A domestic consumer requires one cylinder a month on average. To prevent misuse, one can book another cylinder only 25 days after receiving the previous one. The decision has been taken to prevent unscrupulous elements from stockpiling gases and black-marketeering in times of crisis,” Prakash said, adding that it is not rationing but a way to ensure that resources are used optimally.

Subsidised cylinder price didn't rise: Minister

Union Consumer Affairs, Food and Public Distribution Minister Pralhad Joshi told the media on Saturday (March 7) that the price of subsidised LPG gas cylinders has not been hiked, and the price rise was only for domestic and commercial LPG rates before targeting non-Bharatiya Janata Party-ruled states such as West Bengal and Karnataka, both of which criticised the Centre over the LPG price hike.

Also read: This is the real Gulf War, and the world is paying the price

The Opposition Congress, meanwhile, tore into Union Minister of Petroleum and Natural Gas Hardeep Singh Puri the same day, saying the LPG prices were raised despite the latter saying that the government’s priority was to ensure that fuel remained “affordable and sustainable” for the citizens and that it was doing it “comfortably”. “Never believe a word of Puri, said senior Congress leader Pawan Khera.

Prakash, meanwhile, assured that the supply of PNG (piped natural gas) to the country’s metropolitan areas is continuing uninterrupted.

“The government is on high alert to meet energy demands in both industrial and domestic sectors,” he said, urging consumers to use petroleum products sparingly.

The story was originally published in The Federal Desh.