US share in India's LPG imports surged to over 50% from under 10%, Pg15

Key Highlights:

• India's share of Liquefied Petroleum Gas (LPG) imports from the United States surged to over 50% in the six months from March to August, up from less than 10% in the preceding six months.
• This shift was primarily due to supply disruptions from West Asia, caused by a regional conflict involving the US and Israel striking Iran in late February.
• The conflict led to an effective halt in vessel movements through the Strait of Hormuz, a critical chokepoint for global energy flows.
• India's overall LPG imports declined by over 40% sequentially during the March-August period, while imports from the US nearly quadrupled.

LPG Shift.jpg

Detailed Insights:

• The Strait of Hormuz, located between the Persian Gulf and the Gulf of Oman, is a vital maritime passage through which approximately one-fifth of global oil and liquefied natural gas (LNG) flows, and historically, 80-90% of India's LPG imports.
• India's dependence on imports for LPG stands at around 60-65% of its total consumption, making it highly vulnerable to disruptions in key supply routes.
• The UAE, previously India's largest LPG source, saw its share contract significantly from 37.8% to 13.4% in the March-August period, with import volumes crashing by nearly 80%.
• Similarly, LPG import volumes from Qatar, Kuwait, and Saudi Arabia plummeted by 84.7%, 81.7%, and 76.1% respectively during the same period.
• The US emerged as a readily available alternative supplier, with its LPG being competitively priced even before the conflict, making it a viable option despite longer transit routes.
• The increased reliance on US imports highlights India's efforts to diversify its energy sources and enhance energy security amidst geopolitical uncertainties.
• India's domestic LPG demand has been consistently rising, partly driven by government initiatives like the Pradhan Mantri Ujjwala Yojana, which aims to provide clean cooking fuel to women from Below Poverty Line (BPL) families.

Key Concepts Involved:

• LPG (Liquefied Petroleum Gas): A flammable mixture of hydrocarbon gases, primarily propane and butane, used as fuel in heating appliances, vehicles, and as a refrigerant.
• Strait of Hormuz: A narrow, strategically important waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, crucial for global oil and gas transit.
• Pradhan Mantri Ujjwala Yojana (PMUY): A flagship Indian government scheme launched in 2016 to provide LPG connections to women from BPL households, promoting clean cooking fuel.