India’s import of Liquefied Petroleum Gas (LPG) from America will exceed 1 million metric tons in June, which is a record. In fact, due to supply disruptions from the Middle East, New Delhi has had to turn to high-cost American suppliers. The media report quoted sources as saying that before the US-Israel tension over Iran and the closure of the Strait of Hormuz, India used to source 90 percent of its LPG imports from producers in the Middle East, which totaled about 2 million tonnes per month.
According to government data, due to the blockade of the strait in April, LPG imports had dropped to 696,000 tonnes. However, data shows that imports increased to 1.15 million tonnes in May. Before the blockage, New Delhi had planned to increase LPG purchases from the US to about 10 percent of total imports in an effort to balance trade with Washington.
So that the supply of cooking gas is maintained
A trade source with knowledge of the purchase said in a media report that the closure of the waterway led to an increase in spot buying (immediate purchase) from the US. Indian refiners bought huge quantities of LPG at huge spot market premiums. So that the supply of cooking gas remains continuous. India also asked refiners to increase production of LPG, give priority to the sale of LPG to households and accelerate the expansion of piped gas connections. One of the sources said that due to these efforts, India’s LPG consumption has started reducing by 15 percent to 20 percent.
Where will LPG come to India from?
Two sources in Indian refiners said that India is expected to get about 1.1 million to 1.2 million tonnes of LPG from the US in June, while the supply from the UAE has also improved to about 300,000 to 400,000 tonnes this month. Sources said the UAE offered LPG cargo from Oman’s Sohar port on a ‘free-on-board’ basis at a price that was about $100 a tonne higher than Saudi CP prices.
He also informed that Abu Dhabi National Oil Company has deployed four to five such ships which deliver LPG to Sohar Port. In the media report, quoting sources, it has been said that Indian refiners will also get about 45,000 tonnes of LPG from Kuwait in June. Sources further said that the partial opening of the strait will improve the supply of LPG from the Middle East in the coming months, which will help in reducing prices.
What do Kpler’s statistics say?
According to Kpler data, India imported 648,300 tonnes of LPG from the US and 134,700 tonnes from the UAE in May. Kpler data showed that imports from Iran – mainly by smaller companies with little to no ties to the US – stood at 145,000 tonnes, while shipments from other traditional suppliers such as Saudi Arabia, Oman and Qatar remained limited.
Early data from Kpler for June indicates that India is going to import about 1.07 million tonnes of LPG from the US, about 223,800 tonnes from the UAE, 116,200 tonnes from Iran and 108,600 tonnes from Kuwait. Besides, some quantity of import is also expected from Oman, Saudi Arabia, Algeria, Qatar and Nigeria.
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