Govt relaxes curbs on LPG sales to commercial users as West Asia crisis eases
New Delhi: The government on Thursday relaxed restrictions on the sale of liquefied petroleum gas (LPG) to commercial users, amid expectations of a potential US–Iran
New Delhi: The government on Thursday relaxed restrictions on the sale of liquefied petroleum gas (LPG) to commercial users, amid expectations of a potential US–Iran peace deal that could restore energy flows through the Strait of Hormuz. The move is expected to bring relief to restaurants, eateries, hotels and other LPG-using industries, as well as pharmaceuticals, petrochemicals and related industries. Restrictions on bulk LPG supply - typically used by large industries - have been eased to 50% of pre-crisis consumption levels, according to a 25 June letter from oil secretary Neeraj Mittal to chief secretaries of states and Union territories. "As you are aware, during the period of supply disruptions arising from the West Asia crisis, supplies of commercial packed LPG were curtailed to ensure uninterrupted availability of LPG to domestic consumers. It has now been decided to remove all sectoral restrictions on supply of non-domestic packed LPG and restore it to pre-crisis levels," the letter said. Halt in March The government had halted liquefied petroleum gas supplies for commercial use in March as the US–Israeli war with Iran escalated, disrupting fuel shipments through the Strait of Hormuz, which handles about 20% of global traded energy. Thereafter, supplies were gradually restored to around 80% of pre-war levels, with a committee of state-run oil marketing company (OMC) officials deciding allocations based on user requirements.
Restrictions on domestic LPG bookings, however, remain in place. In March, the ministry mandated minimum refill intervals of 25 days in urban areas and 45 days in rural areas. There were no such curbs before the West Asia crisis. Also Read | Crude price fall may not last as nations rush to rebuild reserves To augment domestic LPG production, the government had also issued orders under the Essential Commodities Act requiring C3-C4 streams to be utilized exclusively for LPG production, diverting them from petrochemical and other downstream uses. In the petroleum and petrochemical sector, C3 and C4 streams refer to specific groups of light hydrocarbon gases separated during oil refining and natural gas processing, which can also be used for LPG production. In view of the improved domestic LPG production and the projected availability of imported LPG cargoes, the government has also decided to reduce the diversion of C3/C4 streams to LPG pool. The enhanced allocation of C3-C4 streams for non-LPG uses will be implemented while ensuring that the domestic LPG availability remains unaffected and aggregate local LPG production is maintained at not less than 40,000 tonnes per day. Data needed The ministry, however, said that all commercial and industrial consumer data must continue to be captured by the oil marketing companies in their databases.
The BriefWire