The government has asked oil refineries to divert part of the feedstock used for cooking gas (LPG) towards petrochemical units, as industries grapple with acute raw material shortages triggered by supply disruptions amid the West Asia conflict, according to PTI.The Ministry of Petroleum and Natural Gas on April 1 directed refiners to allocate a portion of propylene to the petrochemical sector, which has been hit after earlier curbs prioritised LPG output.
At an inter-ministerial briefing, Sujata Sharma, Joint Secretary in the ministry, said the government had initially asked refiners to maximise LPG production following disruption in imports from the Middle East.This was done by diverting hydrocarbon streams—such as propane, butane and propylene—away from petrochemical use.“But then there are certain other sectors which also need some of these molecules and thereby this decision has been taken,” she said.Before the conflict began on February 28, India imported about 60 per cent of its LPG requirement, with nearly 90 per cent of supplies transiting through the Strait of Hormuz, which has since been effectively shut.To boost domestic LPG output, the government had on March 9 directed refineries to channel the entire output of C3 and C4 streams exclusively for LPG production and avoid their use in petrochemicals.This, however, disrupted supply of propylene, impacting plastic manufacturing and downstream sectors such as packaging, food and beverages, FMCG, and even condom production.To ease the shortage, refiners have now been asked to restore partial supply of propylene to petrochemical units.“This move will have an impact on supplies available for domestic LPG, but it will be ensured, and it has been ensured that supplies to domestic consumers are not affected,” Sharma said.She added that the temporary removal of customs duty on certain petrochemical imports would further support affected industries.“I am very very hopeful that it will give us very good results,” she said.While domestic LPG supply has been prioritised, commercial LPG availability was initially impacted. The government later restored supply in phases—first to 20 per cent and then to 50 per cent of normal levels, including a 10 per cent component linked to piped natural gas reforms.This allocation has been prioritised for sectors such as restaurants, hotels, food processing, dairy units, community kitchens and subsidised canteens.Sharma said 4.3 lakh 5 kg LPG cylinders have been sold, and 60,000 tonnes of commercial LPG have been lifted across states and UTs since March 14.Educational institutions and hospitals continue to receive priority, accounting for about 50 per cent of total commercial LPG allocation.The government has now further increased commercial LPG allocation by an additional 20 per cent, taking total supply to 70 per cent of pre-crisis levels.The additional supply is being directed towards labour-intensive and core sectors such as steel, automobiles, textiles, chemicals and plastics, particularly for processes where substitution with natural gas is not feasible.
