Indian Oil Corporation has this time bought liquefied petroleum gas (LPG) imported by Iran after almost eight years due to India experiencing a deteriorating fuel shortage caused by the current geopolitical tension in West Asia. Sources who are knowledgeable about the issue state that the state-owned refiner has purchased a cargo of about 43,000 tonnes of butane and propane its first such transaction since June 2018.
This Indian Oil shipment will also be shared with the other government owned oil corporations such as Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited as the nation attempts to stabilise supply. The cargo is estimated to be able to satisfy just about half a days demand in India, which is very serious in terms of the shortage at hand.
India is a great importer of LPG with almost two-thirds of all of its requirement imported, and about 90 percent of imported LPG originates in West Asia. But, Strait of Hormuz instability due to the current Iran conflict has had great impact on supply chains resulting in country wide shortages.
The crisis has already compelled certain families to use the old fashioned way of cooking through firewood as well as the long queues and in some cases fights at the LPG distribution centres have been reported. The government has since reacted by cutting off supplies to the commercial consumers like hotels and restaurants and increasing efforts to lay down natural gas facilities.
This buy comes after the United States has temporarily waived trade with Iran against the current sanctions. Such developments are being carefully monitored by market observers because this could be an indication that there is a gradual reopening of the energy trading routes with Iran following years of limitations.