Government Diverts LPG Feedstock Amid Petrochemical Shortage

The Indian government has issued a directive requiring oil refineries to allocate part of the feedstock typically used for cooking gas production to industries impacted by a severe petrochemical shortage. This decision aims to support sectors hit by feedstock diversion for LPG production due to disrupted supplies from the Middle East.

Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, explained that the redirection of propylene to the petrochemical industry will provide relief for sectors such as packaging, plastics, and even condom manufacturing. The disruption in LPG supply is primarily due to the effective closure of the Strait of Hormuz amid ongoing regional conflict.

To mitigate shortages, the government not only prioritizes domestic LPG production but has also temporarily lifted import duties on certain petrochemical products. This move is expected to benefit affected industries while maintaining adequate LPG supplies for domestic and commercial use.