Oil & Gas via Strait of Hormuz: Middle East crisis shouldn't affect common man, says PM Modi

Prime Minister Narendra Modi on Tuesday directed all ministers to ensure that the Middle East crisis does not affect the common man, sources told Zee Business. At a meeting of the Cabinet, chaired by PM Modi, various departments of the government discussed the potential impact of the ongoing US-Israel-Iran conflict on India at length. The Ministries of Petroleum, External Affairs and Finance briefed the PM about the conditions.

External Affairs Minister S Jaishankar discussed the situation in the Middle East, and its impact on India, with Petroleum Minister Hardeep Singh Puri in Parliament House.

According to sources, crude oil and LNG consignments from 40 countries were expected in India, with discussions underway. These include:

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• Algeria
• Argentina
• Australia
• Brazil
• Brazil
• Central African Republic
• Colombia
• Congo
• Ecuador
• Egypt
• Equatorial Guinea
• Greece
• Guinea
• Indonesia
• Iran
• Israel
• Korea
• Kuwait
• Libya
• Malaysia
• Mexico
• Nigeria
• Norway
• Panama Republic
• Panama
• Qatar
• Russia
• Saudi Arabia
• South Africa
• Sudan
• Togo
• Turkey
• UAE
• USA
• Venezuela

Centre's top priority is...

The government invoked the Essential Services Maintenance Act (ESMA) on Tuesday to ensure priority allocation of the commodity to certain sectors, days after it directed oil refiners to ramp up LPG production under the Essential Commodities Act, and to prioritise domestic supply amid Middle East supply risks.

The government noted that its top priority is to protect the interests of the consumer. It aims to shield domestic consumers from the impact of the Israel-US-Iran war, which began late last month following the joint US-Israel attacks against Tehran that killed Iran's Supreme Leader.

The oil minister wrote on microblogging site X (formerly Twitter): "In today’s informal interaction with members of the media fraternity, we discussed that India’s energy imports are continuing to flow in from different sources and routes. We have taken steps to ensure that 100 per cent supply of CNG and PNG to domestic consumers is ensured and other industries continue to get 70-80 per cent of their supplies, despite the war situation."

"We are committed to ensure uninterrupted supply of affordable energy to our domestic consumers. There is no shortage for domestic consumers and no reason to panic," added Puri.

Analysts say the conflict could last several more weeks, depending on how long Iran can sustain its missile campaign.

The Centre has formed a special panel to review LPG supply requests from restaurants and other industries after appeals from industry bodies.

India meets about two-thirds of its LPG demand and four-fifths of its crude oil demand through imports. It is the ​world's second-biggest importer of LPG.

'LPG production up 10%, situation improving'

Earlier on Tuesday, Petroleum Ministry sources said that the domestic LPG supplies have improved with a 10 per cent increase in production. "We were in a state of crisis, but that is not the case anymore," said one of the sources.

The remarks from official sources sought to allay growing concerns about LPG supply shortages in different parts of the country, with some restaurants compaining of a supply crunch severely denting their operations.

The dependence on supplies through the Strait of Hormuz has eased while talks for LNG and LPG supplies are on with other nations, according to sources.

Consignments have started to arrive from other countries, they said.

Crude oil supplies

The cuts in supplies to hotels and restaurants are based on their six-month averages, and will continue for now, said the sources.

A panel of oil marketing companies (OMCs) will engage in discussions with restaurants and hotels, they said, adding: "There are sufficient stocks at every depot in the country, with the average refill time of 2.5 days still being honoured... All refineries working at 100 per cent capacity."

"Suppliers are delivering 6 million cylinders daily as before... Stocks will be diverted, if needed," added the sources.

Seventy per cent of the country's crude oil supplies are now sourced through routes other than the Strait of Hormuz, they said.

Here are answers to frequently asked questions (FAQs) on the subject:

Has LPG production increased in India?

Yes. According to oil ministry sources, there is a 10 per cent rise in domestic LPG output after government directives to refineries.

Are stocks and refills normal?

Sufficient stocks exist at every depot nationwide, with average refill times holding at 2.5 days and daily supply steady at 6 million cylinders.

How are crude oil supplies faring?

Seventy per cent of India's supplies now come through non-Hormuz routes.

What is the government's top priority amid growing concerns of an energy crisis in the country?

Domestic consumers are the government's top priority, according to official sources.

What are the latest steps that the government has taken to ensure adequate domestic supplies?

It has invoked ESMA for priority allocations. Last week, it had invoked ECA to order refiners to ramp up LPG production for households.​