Nagpur: Confidence Petroleum, billed to be India’s largest private sector cooking gas bottler, has signed a deal with American trading company, BB Energy, for shipping 12,000 metric tonnes of bulk LPG. The deal comes at a high premium as two of Confidence’s vessels carrying 22,400 tonnes of LPG remain stranded at the Strait of Hormuz, accounting for 45-day stock. The crew is not keen to sail off even if an escort is offered, said sources.This is the first ever contract by the Nagpur company with an American entity and the ship that would sail off from Houston is expected to reach India by mid-April. So far it has been sourcing supplies from Iraq-based Basra Gas Company. This is the fourth ship chartered by Confidence Petroleum amid the US-Iran crisis. Bulk LPG of 12,000 MT that would come from the US is enough to cater to a fortnight’s supply. The company’s chairman, Nitin Khara, who confirmed the development said the new source had to be tapped considering the huge supply gap in the country.Khara said the company signed the contract with the US company as the shortage could continue for at least three months even if the war ends in another fortnight. It has been learnt the company got frantic calls from a leading steel company as depleting LPG stocks have risked closure of its plants. The CEO of a food aggregator company also sent SOS to Confidence Petroleum.Sources said the trading firms are demanding huge premiums due to the shortage of cooking gas. Normally, LPG is traded at the Saudi Aramco Official Selling Price, which is the benchmark rate of the commodity. However, within a day’s session premiums ranging from $350 to $650 a ton were quoted by the trading firms.The two ships stranded at the Strait of Hormuz would have to wait till the situation eases, as the crew is unwilling to move even if a naval escort is offered. Captains of the ships find it too risky to sail through the Strait of Hormuz and have conveyed their decision to wait, sources said. Confidence caters to both domestic and commercial users, as it also exports LPG to neighbouring countries like Bangladesh and Sri Lanka. However, the govt has halted exports, and Confidence will have to unload the entire stock in India.
