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Centre orders refineries to regulate natural gas supply amid West Asia crisis
The Union government on Monday invoked the Essential Commodities Act, directing refineries to regulate the production, supply and distribution of natural gas in the country following disruptions due to the West Asia conflict.
In its order, the Ministry of Petroleum and Natural Gas stated that the conflict has affected liquefied natural gas shipments through the Strait of Hormuz.
The narrow waterbody connects the Gulf to the Arabian Sea. About 20% of global petroleum liquids consumption traverses the maritime chokepoint.
In view of this, the ministry stated that the supply of natural gas to several sectors will be treated as a priority allocation. The sectors include domestic piped natural gas, compressed natural gas for transport, liquefied petroleum gas production and pipeline compressor fuel.
It also directed that fertiliser plants should be supplied with natural gas to the extent of 70% of their past six months’ average gas consumption, subject to operational availability.
The ministry has directed city gas distribution entities to ensure that gas is supplied to industrial and commercial consumers to the extent of 80% of their past six months’ average consumption.
Gas marketing agencies also have to ensure 80% supply to tea industries, manufacturing and other industrial consumers who receive supplies from the national gas grid.
The ministry said that the Gas Authority of India Limited, in coordination with the Petroleum Planning and Analysis Cell, will manage natural gas supplies so as to implement the Centre’s directives.
To meet the requirements of priority sectors, the ministry ordered that gas supplies can be diverted partially or fully from petrochemical facilities, GAIL’s Pata petrochemical complex and Reliance Industries Limited’s oil-to-chemicals operations.
Additionally, oil refining companies have been directed to absorb the impact of LNG supply disruptions by reducing their gas consumption to approximately 65% of their past six-month average, subject to operational feasibility.
After the conflict in West Asia broke out, Iran has effectively blocked the Strait of Hormuz, through which a large share of shipments of liquefied petroleum gas to India from the Gulf region pass.
India imports about 80-85% of the LPG that it consumes and is the world’s second-largest LPG importer after China, according to the BBC.
The conflict in West Asia began on February 28 after Israel and the United States launched a joint operation to “degrade the capabilities” of the Iranian government.
Tehran retaliated by striking Israel and US military bases in the region, and targeting major cities in other Gulf countries and some ships.
The joint attacks by Israel and the US on Iran came amid tensions between the three countries over Tehran’s nuclear programme. Washington acts as a guarantor of Israel’s security. Israel has been claiming that Iran is close to obtaining a nuclear weapon, which could alter the regional security balance.
Tehran has long maintained that its nuclear programme is for civilian purposes.
The US has repeatedly demanded that Iran give up its nuclear programme, threatening that Tehran must meet its terms or face consequences.
Also read: Why the US-Iran war will hurt India more than China
Source: Scroll
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