India Faces LPG Concerns as Consumption Drops 17% In March

India’s LPG consumption fell to about 1.15 million tonnes in early March. That’s a 17.3% drop compared to last year and about 26% lower than February.

The main reason? Supply issues caused by geopolitical tensions in the Middle East, which have made it harder for LPG to reach India.

What Has Disrupted The Supply?

The Strait of Hormuz is a critical transit point for oil and gas shipments. Nearly 90% of India’s LPG imports pass through it.

Officials have reported that at least 22 Indian vessels, including LPG carriers, crude tankers and LNG ships, are stranded in the region, making the situation worse and causing the shortage.

What Steps Has The Government Taken?

Two LPG ships owned by the Shipping Corporation of India recently passed through the area carrying about 92,700 tonnes of LPG. India’s daily LPG use is about 90,000 tonnes, so this amount is just close to a full day’s demand.

Right now, since supply is tight, the government is focusing on meeting household needs first, and cutting supply to industries temporarily.

As ordered by the Government, domestic LPG production in India has increased by around 36% recently. Still, this boost isn’t enough to completely fix the shortage, particularly in high-demand metro areas.

How Is The Shortage Changing Consumption Behaviour?

The shortage is now starting to impact everyday use. In many areas, people are waiting longer for LPG cylinders, and getting a refill has become less reliable.

In cities, some people are switching to electric options like induction cooktops as a backup. This has also led to a slight increase in electricity use in some areas. Because of this trend, shares of companies like Borosil, Hawkins Cookers and Prestige had seen a temporary rise.

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Impact On Oil Companies In India

Although petrol sales increased by 13.2% and diesel rose 8.2% in the same period, the LPG shortage has negatively affected the stock prices of India’s leading oil companies. Indian Oil Corporation’s share price reduced by around 8% in the last week alone. Bharat Petroleum Corporation’s share also dropped 6.30% during this period. Hindustan Petroleum Corporation saw the biggest drop of almost 9%.

At the same time, companies involved in alternative energy or electricity-based solutions may also see increased market attention as consumption patterns shift.

Sources:

The Hindu

ET

Indian Express