India Diverts LPG Feedstock to Support Affected Industries Amid Shortage
Govt asks refineries to reroute LPG feedstock to affected industries
Business StandardImage: Business Standard
The Indian government has instructed oil refineries to reroute a portion of LPG feedstock to support industries facing shortages due to disruptions in petrochemical supplies. This decision aims to balance domestic LPG needs while addressing the raw material shortages in sectors like packaging and manufacturing.
- 01The government is diverting LPG feedstock to support industries affected by petrochemical shortages.
- 02India imports about 60% of its LPG, primarily from the Middle East, which has been disrupted.
- 03Refineries were previously instructed to maximize LPG production at the expense of petrochemical outputs.
- 04Commercial LPG supplies have been partially restored to 70% of pre-crisis levels for essential sectors.
- 05The government is temporarily removing customs duties on certain petrochemical imports to aid affected industries.
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In response to a significant petrochemical shortage affecting various industries, the Indian government has directed oil refineries to allocate a portion of feedstock typically used for producing cooking gas (LPG) to sectors in need. This decision comes after the ongoing conflict in the Middle East disrupted LPG imports, which previously constituted about 60% of India's consumption. The Ministry of Petroleum and Natural Gas highlighted that, while domestic LPG production was prioritized, the diversion of propylene to petrochemical industries is necessary to support manufacturing sectors, including packaging and condom production. To mitigate the impact on LPG supplies, the government has temporarily lifted customs duties on specific petrochemical imports and restored commercial LPG allocations to 70% of pre-crisis levels, prioritizing key sectors such as restaurants and food processing. Sujata Sharma, Joint Secretary in the Ministry, expressed optimism that these measures will yield positive results for the affected industries.
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This decision aims to stabilize the supply of essential materials for affected industries, ensuring that sectors like packaging and food processing can continue operations despite the ongoing shortages.
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