Rajat Sharma’s Blog | LPG crisis: What is the need to do politics on this?

The war in the Gulf entered its twelfth day today. Israel also bombed Iran and Lebanon today, while Iran continued to attack Kuwait, Qatar, Saudi Arabia and the Emirates with missiles and drones. The price of crude oil in the international market fell to $ 88 per barrel on Wednesday because the International Energy Agency has decided to open oil reserves to control oil prices.

The government on Tuesday issued an order to control the supply of LPG by implementing ESMA (Essential Services Maintenance Act). Now the biggest priority will be given to domestic LPG supply and transportation. Gas supply to fertilizer factories has been reduced by 30 percent, and gas supply to industries connected to the national gas grid has been reduced by 20 percent.

The government has said that there are sufficient stocks of oil and gas in the country and there is no need to create panic regarding this. A committee of executive directors of the three big government oil companies has been formed to monitor the supply of LPG cylinders. State governments have been asked to take immediate steps to stop hoarding and black marketing of LPG cylinders. Long queues for LPG cylinders were seen in cities and towns of Uttar Pradesh, Bihar, Maharashtra, Karnataka, Madhya Pradesh, Bengal, Haryana, Delhi, Rajasthan and Jharkhand.

Hoteliers associations in Mumbai, Bangalore and Hyderabad have complained that they are not getting commercial LPG cylinders. Distributors are refusing to provide commercial LPG cylinders. Bengaluru South BJP MP Tejasvi Surya has written a letter to Petroleum Minister Hardeep Puri requesting to continue the supply of commercial gas to hotels.

There is a need to understand why the government had to take steps to control the supply of LPG and LNG. The Strait of Hormuz is closed due to war. Through this route, crude oil and natural gas are supplied to India from the Gulf. India imports 60 to 65 percent of its LPG requirement and out of this, 80-85 percent of the LPG comes through the Strait of Hormuz.

Apart from this, one problem is that India does not have any buffer stock of LPG. Oil refineries have a two-week stock of LPG. In such a situation, it is natural that there will be shortage of gas due to supply stoppage, but the government had already started preparations to deal with it. Firstly, refinery companies have increased the production of LPG by ten percent. Apart from this, the government is in talks with Russia, Australia and Nigeria to increase gas supply, but it will take time. Till then the supply of LPG has been controlled so that the common people do not face any problem.

Apart from LPG, India also uses liquefied natural gas in large quantities. India consumes 50 million tonnes of LNG every year. We buy 25 to 26 million tonnes of LNG from other countries. Qatar is the second largest exporter of liquefied natural gas in the world. Qatar alone supplies 40 to 45 percent of India’s imports of LNG. Apart from this, India also buys LNG from UAE, Kuwait, Oman and Saudi Arabia. This LNG is supplied to industries. This LNG is supplied to homes as piped gas. LNG is also supplied to the fertilizer industry, power generation companies and manufacturing sector.

When Iran attacked Qatar’s gas production terminals last week, Qatar halted production and exports of LNG. Due to the closure of the Strait of Hormuz, the supply of LNG from Oman, UAE, Kuwait and Saudi Arabia has also come to a standstill. Now India is trying to bring LNG from America, Australia and Malaysia.

Now let’s talk about the politics regarding LPG shortage. Congress is not concerned with the fact that oil prices have started increasing all over the world but the prices have not been increased in India. Akhilesh Yadav is not even concerned about the fact that the Government of India acted with foresight and we have eight weeks of stock. Congress is only concerned about why Modi went to Israel. Congress complains as to why Donald Trump said that America allowed India to buy oil from Russia.

The public neither cares about the fact that Modi went to Israel, nor about Trump’s statements. What matters to the public is that gas is available to light the stove at home and the price of petrol remains stable. It is this difference that matters. (Rajat Sharma)

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