LNG imports hit, essential commodities Act invoked, gas allocation prioritised, Pg3

Key Highlights:

• Government invokes Essential Commodities Act due to disrupted LNG supplies via Strait of Hormuz.
• Priority sectors like PNG, CNG, and LPG production receive precedence in natural gas allocation.
• Refineries' natural gas supply cut to 65% of their past six-month average consumption.
• GAIL to manage natural gas supplies as per the government order.

Detailed Insights:

• The order aims to manage shortages by diverting gas from non-priority sectors to high-priority sectors impacting common consumers.
• Besides domestic gas and imported LNG, priority sector demand will be met through curtailment of gas to petrochemical units, gas-based power plants, and consumers of domestic gas from difficult blocks.
• Four priority categories are defined, with domestic PNG, CNG, LPG production, and essential pipeline operations receiving 100% of their average gas consumption.
• Fertilizer units receive 70%, tea industries and other industrial consumers get 80%, and commercial/industrial consumers of city gas distribution companies receive 80%.
• Reliance Industries (RIL) stated it is compliant with the order, maximizing LPG production and diverting KG-D6 Basin gas to priority sectors.
• India relies on imports for about half of its 190 mscmd natural gas needs, with over 50% coming via the Strait of Hormuz.

Key Concepts Involved:

• Essential Commodities Act: Law ensuring supply of essential commodities to consumers.
• Liquefied Natural Gas (LNG): Natural gas converted to liquid form for ease of storage and transport.
• Piped Natural Gas (PNG): Natural gas supplied to households through pipelines for domestic use.