India Activates 'Emergency Powers' to Secure Cooking Gas Amid Middle East Crisis

SadaNews Economy - India has activated emergency powers and issued orders for refineries to maximize production of liquefied petroleum gas to avoid cooking fuel shortages due to supply disruptions caused by the crisis in the Middle East, according to a government order.

India, the world's second-largest importer of liquefied petroleum gas, consumed about 33.15 million metric tons of cooking gas last year, which is a mixture of propane and butane. Imports account for about two-thirds of consumption, with between 85 and 90 percent of these supplies depending on the Middle East, according to Reuters.

The order issued late Thursday states that all oil refineries are required to "optimally and assuredly use the propane and butane available to them to produce liquefied petroleum gas."

The government has asked producers to supply liquefied petroleum gas, propane, and butane to state-owned refineries - Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation - to distribute to households, while the number of active liquefied petroleum gas consumers in the country amounts to about 332 million consumers.

It is expected that the mandatory conversion of propane and butane to produce liquefied petroleum gas will reduce the production of alkylates, one of the components used for blending gasoline, at Reliance Industries Limited, which exported about 4 shipments per month last year, according to data from the London Stock Exchange Group. The government has also ordered refineries not to use propane and butane for petrochemical production.

A trade source indicated that the conversion of propane and butane for liquefied petroleum gas production will negatively affect the profit margins of petrochemical companies producing materials such as polypropylene and alkylates, due to their higher prices compared to liquefied petroleum gas.