India has bought its first cargo of Iranian liquefied petroleum gas in years, marking a significant shift in the country's energy landscape. The purchase was made after the US temporarily removed sanctions on Tehran's oil and refined fuels, according to three industry sources. This development comes as India continues to grapple with a severe gas crisis, with the government cutting supplies for industries to shield households from any shortage of cooking gas.
The tanker carrying Iranian LPG is expected to shortly reach the west coast port of Mangalore, where it will be shared among three fuel retailers: Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp. The cargo has been purchased from a trader, with payment to be made in rupees, according to the sources. This move indicates that India is exploring buying more Iranian LPG cargoes.
The South Asian nation has been hit hard by the disruption of energy shipments via the Strait of Hormuz caused by the US-Israeli war with Iran. The crisis has led to a significant increase in prices for LPG, making it challenging for Indian households to afford cooking gas. The government's decision to cut supplies for industries is aimed at preventing any shortage of cooking gas for households.
The three fuel retailers and India's oil ministry did not immediately respond to requests for comments on the purchase of Iranian LPG. However, the move suggests that India is seeking to diversify its energy imports and reduce its reliance on a single region. This is particularly important given that about 90% of India's imported LPG comes from the Middle East.
The world's second-largest LPG importer is battling its worst gas crisis in decades. The government has cut supplies for industries, while households are being shielded from any shortage of cooking gas. The crisis has led to a significant increase in prices for LPG, making it challenging for Indian households to afford cooking gas.
India consumed 33.15 million metric tons of LPG last year, with imports accounting for about 60% of demand. About 90% of those imports came from the Middle East. The country's reliance on Middle Eastern energy imports is a concern given the geopolitical tensions in the region.
The recent purchase of Iranian LPG marks a significant shift in India's energy landscape. The move suggests that India is seeking to diversify its energy imports and reduce its reliance on a single region. This is particularly important given the ongoing crisis in the Strait of Hormuz.
India is gradually moving out its stranded LPG cargoes from the Strait of Hormuz, with four LPG tankers moved so far. The country is also loading LPG onto its empty vessels stranded in the Persian Gulf. These efforts aim to reduce India's reliance on the Strait of Hormuz and mitigate the impact of any future disruptions.
The purchase of Iranian LPG by India highlights the need for the country to develop a more resilient energy system. As the global energy landscape continues to evolve, it is essential for India to prioritize diversification and security in its energy imports.
The recent lifting of US sanctions on Iran highlights the need for India to diversify its energy imports and reduce its reliance on a single region.
