The LNG distribution industry in India is calling on the government to support an LNG infrastructure buildout as costs for trucking would be lower than the spiking diesel prices.
Currently, India has government support for ethanol infrastructure, but not for LNG, which is now 42% cheaper than diesel for the freight industry, industry executives told Indian outlet BusinessLine.
“Historically, LNG adoption has been constrained more by infrastructure availability than economics,” Deepak Acharya, Managing Director at cryogenic engineering company INOXCVA, told the publication.
The firm has approached India’s Ministry of Petroleum and Natural Gas with a call for support for LNG infrastructure, storage, and freight-corridor development, similarly to how India is currently backing the ethanol industry.
The recent spikes in diesel and compressed natural gas (CNG) prices due to the oil and gas price rally following the Iran war have made LNG for trucking even more competitive, according to industry executives.
Last week, India’s state-owned energy majors that trade in fuels raised prices at the pump for the fourth time in the space of a month, reflecting the continued effect of the Strait of Hormuz closure on oil and fuel flows.
The cumulative price hike since the start of the month comes in at 8.6% for diesel fuel and 7.8% for gasoline.
The first fuel price hike took place in Mid-May, with refiners including Indian Oil Corp., Bharat Petroleum Corp, and Hindustan Petroleum Corp. hiking their retail prices by over 3% for the first time in four years.
Since the war in the Middle East began and cut off over 40% of India’s crude oil flows, those that passed through the Strait of Hormuz, one of the highest-flying economies in Asia, has seen its oil import bill soar, investors fleeing the capital market, and the local currency plunging to an all-time low against the U.S. dollar.
The Indian government, meanwhile, has called for fuel conservation, including through working from home, carpooling, and using public transport instead of personal vehicles.
By Tsvetana Paraskova for Oilprice.com
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