India’s frenzied efforts to counter disruptions in cooking gas supplies over the past months, while cargoes remained trapped in the Persian Gulf, has left state-run fuel retailers with the opposite problem — more than they can sell.
The three refiners run by the government, including India’s biggest processor Indian Oil Corp., had booked liquefied petroleum gas supplies amounting to as much as 40,000 tons a day, according to people familiar with the situation. The daily import requirement now, however, is closer to 30,000 tons to 32,000 tons.
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Part of the drop is explained by a boost in production from state processors themselves, which lifted output by more than two-thirds to about 54,000 tons a day after the near-total closure of the Strait of Hormuz crimped shipments. Daily production has since been scaled back to about 40,000 tons, the people said, asking not to be named as they aren’t authorized to speak with media.
But demand has also been slow to recover, especially when it comes to large consumers such as restaurants or industrial outfits such as ceramic-tile manufacturers, who switched to alternative fuels like piped gas during the supply crisis. Consumption in June was about 73,000 tons a day, compared with 91,000 tons average in the year ended in March, according to oil ministry data.
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