New Delhi: India eased a month-long mandate requiring all refinery byproducts to be used for cooking gas production, allowing some essential components, such as propane, polypropylene, and butane, to return to pharmaceuticals, food, distribution, and petrochemicals. The decision balances an increasing regional energy crunch with the survival of critical manufacturing sectors.
The allocation for the critical sectors will be based on the recommendations from the Centre for High Technology, which functions under the ministry of petroleum and natural gas.
The components under the ‘C3 and C4’ streams of crude oil 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 directed that these components be diverted solely for LPG production.
A 1 April order mandates that refineries maximize LPG production while providing government-regulated minimum feedstock to critical industries.
Addressing the media on the developments in the West Asia war and domestic fuel stock situation, Sujata Sharma, joint secretary, ministry of petroleum and natural, gas said, "There are certain other sectors which also need some of these molecules and thereby this decision has been taken and there will be an impact on supplies available for domestic (LPG) but it will be ensured and it has been ensured that supplies to the domestic consumers are not affected."
Further, amid volatility in the global oil market and uncertain supply chains, India is looking at expanding its strategic crude reserve capacity, Sharma said.
Mint earlier reported that the West Asia war has expedited India’s much-delayed strategic petroleum reserves (SPR), with Indian Strategic Petroleum Reserve Ltd (ISPRL) shortly floating the request for proposal (RFP) for the 4 million metric tonnes (MMT) SPR in Chandikhol (Odisha) by April end, and talks are underway to further expand the country's strategic crude reserve.
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 crude reserves of 6.5 million tonnes. The government last month informed Parliament that out of the total capacity of 5.33 million tonnes (MT) of strategic crude oil reserves at three locations in Andhra Pradesh and Karnataka, which can act as a buffer for short-term supply shocks, about 3.372 MMT of crude stock is currently available, which is around 64% of the total storage capacity.
In a meeting with additional chief secretaries and principal secretaries (food & civil supplies) of all states and Union territories on Thursday, petroleum secretary Neeraj Mittal stressed that they must manage and prioritize LPG distribution to ensure uninterrupted supply for domestic consumers and essential sectors.
About reports concerning free trade LPG (FTL) supplies to migrant workers, states clarified that there is no disruption in LPG supply affecting migrants and that supplies remain stable, according to the petroleum ministry's statement. The secretary informed that states may consider managing targeted distribution of 5 kg free trade LPG cylinders, based on local requirements, along with oil marketing companies. Regarding LPG for autos, the ministry stated that efforts are ongoing to meet this demand, and autos that can run on both LPG and petrol should be encouraged to use the latter.
