The disrupted liquefied petroleum gas supply chains could take up to three to four years to recover, which would extend India’s LPG recovery from the current crisis, according to a government official.
“Based on inputs from affected suppliers, restoration could take at least three years, and possibly longer,” a senior Indian government official told Moneycontrol on condition of anonymity.
The war in the Middle East has stranded much of the energy supplies typically going to India via the Strait of Hormuz, creating a crunch in oil and gas supply in the world’s third-largest crude oil importer, which also depends on LPG for most of its cooking fuel.
India relies on Qatar for 45% of its LNG supply and 20% of LPG supply, and the tiny Gulf state is the single biggest supplier of both fuels to India.
Last month, state firm QatarEnergy said that Iranian missile strikes on production facilities would result in a loss of about 13% of Qatar’s LPG exports, with key facilities taking up to five years to repair.
“Your LPG supply might take that long because some of the very critical LPG supplies are shut down. What ‘shut’ exactly means is not fully clear — whether entire wells have been exhausted or production has stopped — but they themselves are saying it will take at least three years,” the official told Moneycontrol.
Around 60% of Indian households rely on LPG for their primary cooking fuel, and the blockage at the Strait of Hormuz, from where 90% of all Indian LPG imports pass, has been immediately felt by consumers.
Some Indian tankers carrying LPG have cleared the Strait of Hormuz in recent weeks despite the de facto closure of the critical oil and gas chokepoint.
Amid the supply shortage, the Indian government has cut LPG supplies to commercial establishments and industries to have more cooking gas available for household use. Authorities are also pushing for an expansion of the city pipeline gas networks to replace LPG cylinders and use where possible.
By Tsvetana Paraskova for Oilprice.com
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