India Ends Curbs on Commercial Gas Supply

India has removed restrictions on supplies of commercial liquified petroleum gas imposed during the Middle East war when energy supplies were hit by the closure of the Strait of Hormuz.

India, the world’s most populous country, is the second-largest importer of LPG, much of it from the Middle East. A fifth of global oil and gas usually pass through the waterway, which was shut after the start of the US-Iran war in late February. The government ended the restrictions late Thursday on “non-domestic packed LPG and restored supplies to the levels prevailing prior to the West Asia crisis”, the petroleum ministry said in a statement.

“The supply of bulk LPG, which had been suspended at the onset of the crisis, has been relaxed by 50 percent of the pre-crisis consumption levels,” the statement added. “The restoration follows the recent improvement in the LPG supply situation.” The decision follows improved energy cargo passing through the Strait of Hormuz after Iran and the US signed a deal that included opening the strategic waterway. During the crisis, the government raised prices for LPG, a primary cooking fuel for millions of households.

Last month India also approved a nearly $4 billion plan for expanding coal gasification a cleaner process to burn coal aiming to ease energy supply pressures caused by the war. Supply disruptions through the Gulf routes piled pressure on India’s economy, clouding growth forecasts.

India has decided to restore 50 percent LPG supplies to commercial and industrial customers whose allocation had been suspended.

The South Asian nation has also decided to increase the supply of propane, butane, and other molecules for petrochemical production, the government said. Agencies Before the conflict, India was buying 90 percent of its LPG imports from Middle Eastern producers. 

Those supplies were hit following the closure of the Strait of Hormuz, forcing India to diversify its purchases raising imports from the US. 

India’s LPG imports from the US are set to top 1 million metric tons in June, a record high. The nation has decided to produce at least 40,000 metric tons daily, the government said. 

Due to the disruption, India had curtailed LPG supplies to some industries and commercial consumers as it prioritized sales to households. In India LPG, a mix of propane and butane, is used as cooking fuel. The government had also instructed petrochemical makers to divert their feedstock to refiners to maximize local LPG output.