Where and how is crude oil to be used? Indian government setting priorities, effects of Iran war
In light of the Iran war, the Indian government is redefining its priorities for the use of crude oil and has instructed refineries to increase LPG production.
Amidst the backdrop of the Iran war, the Indian government is re-evaluating its strategies regarding the utilization of crude oil. This reassessment comes as India faces potential disruptions in supply from West Asia, prompting the authorities to plan the optimal usage of crude oil resources. The government has assured that there is no shortage of LPG in the country and has directed oil refineries to prioritize the production of liquefied petroleum gas (LPG). In light of the current geopolitical tensions, maintaining a stable supply of LPG has become crucial for the nation.
India, being the world's second-largest importer of LPG, consumed approximately 33.15 million metric tons of fuel last year, with about two-thirds of this demand met through imports. Notably, West Asia accounts for 85 to 90 percent of India's LPG supply, placing the country in a vulnerable position in the event of regional supply disruptions. In response to these risks, the Indian government has empowered domestic producers to utilize available propane and butane resources, further emphasizing the need for enhancing LPG outputs.
The government's proactive measures and strategic plans to source liquefied natural gas (LNG) from regions beyond the Gulf countries indicate an effort to diversify supply chains and bolster energy security. By ensuring that LPG shortages do not occur, the Indian government is taking necessary steps to safeguard its energy needs, while also adapting to the dynamic global energy landscape influenced by ongoing conflicts and market fluctuations.