Cylindrical vision

Commercial LPG price has been hiked before, in fact, during the Hormuz crisis. But yesterday’s increase captures the true extent of supply disruption. A 48% increase – from Rs 2,078.5 to Rs 3,071.5 – is unprecedented. Obviously, there are limits to the cushion govt can provide.

When war broke out on Feb 28, many tankers were at sea. Gas kept arriving through March, although Hormuz was closed. But April, as TOI reported yesterday, has been a difficult month, especially on the LPG front. Imports of this fuel halved from 2mn tonnes a month to less than 1mnt. That left a huge supply hole, despite Indian refiners increasing LPG production by 30%.
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So far, households, which use 84% of LPG, have been spared. But if the blockade continues, they should brace for pain. A sharp price increase could undo years of efforts to coax millions of poor households to use clean fuel. The same risk exists with commercial LPG. Beyond restaurants, LPG’s become the preferred fuel in industries like ceramics. In fact, before the war, commercial LPG use was growing thrice as fast as household use.
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India’s trying to get more LPG from US now, but it costs more to ship, and takes longer to arrive. May’s dispatches won’t arrive before July. Even crude isn’t as easily available as steady pump prices suggest. Last month, India averaged imports of only 4.4mn barrels per day, down from 5.2mn bpd in Feb. No doubt, this crisis will end at some point, and fuel prices will tumble eventually. But each day, until then, will be a drag on the economy.

​​That’s why India must plan for resilience. Hydrocarbons will, of course, remain crucial as industrial feedstock. But transport, cooking, heating, power generation – those sectors should be weaned urgently. Nuclear, renewables, and biofuels – our mountains of waste are waiting to be gasified – the solutions already exist.

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