The war in the Gulf continued on the 12th day as Israel launched new attacks on Iran and Lebanon, while Iran counterattacked with missiles and drones on Kuwait, Qatar, Saudi Arabia and the UAE.
International crude price fell to $88 a barrel on Wednesday after International Energy Agency announced it would consider releasing emergency oil reserves to stabilize global oil market.
In India, the Centre on Tuesday invoked ESMA (Essential Service Maintenance Act) to regulate supplies of commercial and domestic LPG. Under the new Natural Gas (Supply Regulation) Order, priority allocation will be given to domestic piped natural gas supply, CNG used in transport, LPG production and essential pipeline operations.
Fertilizers companies have been placed in second priority category and they will get up to 70 pc of their average gas requirement. Industrial consumers connected through national gas grid and city gas distribution networks will get around 80 pc of their average consumption, depending on availability.
The Centre has said there is adequate stock of natural gas and petrol and diesel, but abundant caution is being taken.
States have been asked to stop black marketing and hoarding of LPG cylinders to stop panic buying. Meanwhile, long queues were noticed outside LPG gas agencies in UP, Bihar, Jharkhand, Rajasthan, MP, Maharashtra, Haryana and Delhi.
Refill booking of domestic LPG cylinders has been extended from 21 days to 25 days, while oil refineries have been directed to raise LPG production by 10 per cent.
Hotel owners’ associations in Mumbai, Bengaluru, Hyderabad and other cities have complained they are not getting commercial LPG cylinders.
The Petroleum ministry has set up a committee of executive directors from Indian oil, Bharat Petroleum and Hindustan Petroleum to listen to the grievances of hotel owners.
The question is: why LPG supplies are being regulated?
The Strait of Hormuz through which India gets most of its crude and natural gas is closed since last 12 days. India imports 60-65 pc of its LPG requirements, out which 80-85 pc LPG comes through Strait of Hormuz.
Moreover, India has adequate oil reserve to last for 25 days, but there is no LPG reserve. Oil refineries only keep LPG stocks for a week or two.
With the supplies from the Gulf coming to a stop, LPG shortage is bound to occur. But the government has already put an action plan in place.
Oil refineries have been asked to ramp up LPG production and India is trying to import LPG from Russia, Australia and Nigeria. It may take time for talks to fructify.
For the time being, in order to meet the shortage, LPG supply is, therefore, being regulated.
Apart from LPG, India uses huge quantity of LNG (liquified natural gas).
Annually, India consumers 50 million tones of LNG, out of which 25-26 million tones of LNG is imported. Qatar is the world’s second biggest exporter of LNG. It exports 40-45 pc of India’s LNG requirements.
India also imports LNG from UAE, Kuwait, Oman and Saudi Arabia, and this is supplied to industries. LNG is also supplied in the form of piped gas to domestic consumers, apart from fertilizer industry, electrical component industry and manufacturing sector.
When Iran attacked Qatar’s gas production facilities last week, it stopped production and export of LNG immediately.
With the Strait of Hormuz closed, LNG supplies from Oman, UAe, Kuwait and Saudi Arabia have also stopped. India is now trying to import LNG from the US, Australia and Malaysia.
Petroleum Minister Hardeep Singh Puri has said that unnecessary panic is being created by Congress and other opposition leaders in several states. He assured there is enough stock of LPG, petrol and diesel and there are no reasons to worry.
Samajwadi Party chief Akhilesh Yadav has demanded that the government must clarify its stand on shortage of LPG cylinders and hike in LPG prices. He warned that if the shortage continues, LPG cylinder will go beyond the reach of the common man and people may be forced to use charcoal and wood-fired stoves.
My point of view: The Congress has nothing to say when the Centre refrained from hiking prices of petrol and diesel despite increase in fuel prices across the world.
Akhilesh Yadav is not bothered when the Indian government acted with foresight and ensured that India had eight weeks of oil stocks.
Congress is upset why Prime Minister Narendra Modi visited Israel before the outbreak of Gulf war.
Congress has problems over why Donald Trump and his minister said, the US has given permission to India to buy Russian oil.
The public is least bothered about why Modi visited Israel or what Trump and his minister said about allowing India to buy Russian oil.
What matters to the public is, it must get uninterrupted supply of LPG and the prices of petrol and diesel remain stable. It is this difference that matters for the people of India.