Two months of oil and fuel stocks in place, month of LPG supply ‘firmly arranged’: Govt

“Despite the situation at the Strait of Hormuz, India is today receiving more crude oil from its 41-plus suppliers across the world than what was previously arriving through the Straits. High volumes available in international markets — especially from the western hemisphere — have more than compensated for any disruption. Every Indian refinery is running at over 100% utilisation. Crude oil supplies for next 60 days have already been tied up by Indian Oil companies. There is NO supply gap,” the Petroleum Ministry said in a release.

India has 74 days of total reserve capacity while the actual stock cover is around 60 days. These include crude oil stocks, petroleum fuel stocks, and the country’s strategic petroleum reserves.

Police personnel stand guard as people queue up at a petrol pump in Prayagraj on Wednesday. (PTI)

Nearly two months of steady supply is available “for every Indian citizen regardless of what happens globally”, and India is “completely secure for next many months”, it said.
According to sources, as crude gets processed into fuels and current fuel stocks get consumed on an ongoing basis, the oil and fuel supply situation should remain stable with non-West Asian crude supplies continuing unabated. India has ramped up oil imports from such sources, particularly Russia, to mitigate the impact of the Gulf supply hit.

“Where isolated instances of panic buying occurred at select pumps, they were driven by deliberate misinformation… Steps have also been taken by Oil Companies to increase credit to petrol pumps to over three days from one day…,” the ministry said.

According to industry insiders, some fuel pump dealers had raised concerns that a recent change implemented by oil marketing companies (OMCs) in payment terms had impacted their operations. Till sometime back, in some cases, the OMCs were allowing dealers to take fuel on a few days of credit, but amid the West Asia crisis, the credit periods had been effectively done away with. This had led to some dealers, particularly the smaller petrol pumps, finding it difficult to arrange the required capital for upfront payments for fuel to the OMCs.

In terms of LPG, measures such as ordering refiners to maximise LPG production, have led to an increase of 40% in domestic production vis-à-vis pre-West Asia conflict levels. The government said that domestic production is now meeting over 60% of India’s current daily requirement of 80,000 tonnes, which is predominantly household demand.

“The net daily import requirement has come down to only 30 TMT (thousand metric tonnes) — meaning India is now producing much more than it needs to import. Over and above domestic production, 800 TMT of assured inbound LPG cargoes are already secured and en route from the United States, Russia, Australia, and other countries… Approximately one full month of supply is firmly arranged, with additional procurement being finalised continuously,” the Petroleum Ministry said.

According to the government, despite LPG supplies to India being affected by the West Asia war and the Strait of Hormuz closure, the OMCs are maintaining supplies to households at the pre-conflict level of over 50 lakh cylinders a day, and no dry-out has been reported at any LPG distributorship across the country. “Demand had gone up to 89 lakh cylinders due to panic ordering by consumers and has now come down to 50 lakh cylinders again. Commercial cylinder allocations have been raised to 50% in consultation with state governments to avoid hoarding or black marketing,” the Petroleum Ministry said.