Context:
Due to escalating West Asia conflict, shipping through the Strait of Hormuz has effectively halted.This has disrupted Liquefied Natural Gas (LNG) shipments to India.
- In response, the Essential Commodities Act, 1955 has been invoked by the Ministry of Petroleum and Natural Gas to ensure priority allocation of natural gas to critical sectors.
Key Takeaways:
Why LNG Supply to India is Hit?
Dependence on West Asia:
- India consumes about 190 million standard cubic metres per day (mscmd) of natural gas.
- 50% of this demand is met through LNG imports.
- More than 50% of LNG imports come from Qatar and UAE via the Strait of Hormuz.
Key facts:
- Handles 20% of global oil trade.
- Critical route for global LNG shipments.
- Around 30% of India’s gas consumption is linked to supplies passing through this route.
Current issue: Iran has warned vessels and some ships were reportedly attacked – insurance, shipping firms and traders halted movement.
Government Emergency Response:
The government issued gas allocation priorities to manage shortages.
| Sector | Allocation | |
| 1st Priority | Piped Natural Gas (PNG) for householdsCompressed Natural Gas (CNG) for vehiclesLiquefied Petroleum Gas (LPG) productionEssential pipeline operations | 100% of last 6-month average consumption |
| 2nd Priority | Fertilizer sector | 70% allocation |
| Lower priority | Petrochemicals, gas power plants, refineries | Supply curtailed |
| Additional actions | Refineries | Natural gas supplies to refineries have been reduced to 65% of their average consumption. |
Additional actions:
- Natural gas supply to refineries cut to 65% of average consumption.
- Gas from KG-D6 Basin redirected to priority sectors.
Impact of LNG Supply Crisis and Government Response / Strategies:
The disruption in LNG supplies highlights India’s energy vulnerability to geopolitical chokepoints like the Strait of Hormuz. While emergency allocation protects households and transport sectors, the crisis underscores the urgent need for energy diversification, domestic production, and accelerated transition to renewable energy.
Source: (The Indian Express)
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