The strategic vulnerability in India’s LPG supply model, Pg10

Key Highlights:

• India's LPG consumption reached 33.15 million tonnes last year, with domestic production only meeting 40% of the demand.
• Approximately 90% of India's LPG imports pass through the Strait of Hormuz, creating a strategic vulnerability due to regional tensions.
• India's LPG storage capacity is limited to about 1.5 days of national demand, with only 140,000 tonnes in underground caverns.
• The article suggests reserving domestically produced LPG for household use, building deeper storage, and promoting electric cooking to reduce vulnerability.

Detailed Insights:

• India's heavy reliance on LPG imports for household cooking makes it more vulnerable compared to countries like Japan, China, and South Korea, which have diversified energy sources.
• Unlike other nations where LPG is used in petrochemical industries, in India, it is primarily used in domestic kitchens, making demand inelastic and difficult to defer.
• The concentration of LPG imports from the Gulf region exposes India to supply disruptions, as a few Asian countries already claim a significant portion of the exportable pool.
• Prioritizing domestically produced LPG for household fuel, encouraging petrochemical users to arrange their own imports, and building an LPG buffer of 1.3 to 1.9 million tonnes are crucial steps.
• Promoting electric cooking in urban and semi-urban areas through initiatives like "Give it up 2.0" can reduce dependence on LPG and diversify cooking fuel options.
• Expanding Piped Natural Gas (PNG) infrastructure where feasible and promoting electric cooking are essential strategies to reduce the number of households solely reliant on LPG.

Key Concepts Involved:

• LPG (Liquefied Petroleum Gas): A flammable mixture of hydrocarbon gases used as fuel in heating appliances, cooking equipment, and vehicles.
• Strait of Hormuz: A narrow waterway between Oman and Iran, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, crucial for global oil and gas transport.
• Petroleum Planning and Analysis Cell (PPAC): A body under the Ministry of Petroleum and Natural Gas in India that provides data and analysis on the petroleum and natural gas sector.

Strait of Hormuz