India's Contingency Plans for Fuel Shortages
India is considering several contingency options to address potential fuel shortages due to disruptions in the Strait of Hormuz.
Current Situation
- Brent crude prices surged nearly 10% to $80 a barrel.
- European gas prices jumped over 40% due to the West Asia conflict and attacks on energy facilities.
- Tanker movements through the Strait of Hormuz remain limited, raising supply concerns.
- US President Donald Trump anticipates the conflict could last up to four weeks.
Proposed Measures
The government and industry officials are exploring multiple strategies:
- Restricting Fuel Exports: Consideration of limiting petrol and diesel exports to ensure domestic availability.
- Increasing Russian Crude Imports: Boosting imports from Russia as an alternative source.
- LPG Rationing: Implementing demand-management measures like LPG rationing.
- Refinery Adjustments: Redirecting surplus Aviation Turbine Fuel (ATF) to other product streams if needed.
Vulnerability and Preparedness
- LPG Dependency: India relies on imports for nearly two-thirds of its LPG consumption, with 85-90% sourced from the Gulf.
- Two Weeks Coverage: Current stocks may cover less than two weeks if supplies are interrupted.
- Crude and Refined Reserves:
- Crude reserves cover about 17-18 days of consumption.
- Refined fuels like petrol and diesel cover 20-21 days.
- LNG stocks cover approximately 10-12 days.
Industry Response
- Indian Oil, HPCL, and BPCL are increasing LPG output at select petrochemical integrated refineries.
- Targeted demand-management steps, such as LPG rationing for those with alternative fuels, are under discussion.
