CHENNAI: The country, particularly south India, is facing an acute shortage of liquefied petroleum gas, something that the state-owned oil marketing companies attribute to a combination of factors, including financial constraints in the backdrop of their mounting under-recoveries.
“It is a crisis and prevails, ironically, during the beginning of a lean demand period,” an official of Indian Oil Corporation said, pointing out that cooking gas consumption drops in summer. The demand slows down in April and picks up late August or early September.
It soars in the last quarter, primarily on account of weather conditions and festivals.
The bottling plants of the companies, however, are struggling to clear the backlog with low stock. In some locations, including Tamil Nadu, the domestic consumers get refill supplies nearly two months from the previous supply. Sources in oil industry said there had been instances in recent past when the bottling had to be stopped for a few hours the plant had run out of stock.
The LPG stock in the country is about 2.90 lakh tonnes, which is roughly about six days cover. The backlog, as per figures obtained from IOC, was of the order of 63,000 tonnes a couple of days ago. The south is severely hit with the backlog in the region estimated at 35,000 tonnes. Seventy domestic cylinders, 14.2 kg each, can be bottled with a tonne of LPG.
Various factors over the last few months have contributed to the situation, sources in the oil industry said. These include issues that affected the product discharge at the import terminals in Mangalore and Vishakapatnam, less availability and high prices in the international market, financial health of the oil marketing companies and the strike by bulk LPG transporters.
The per tonne price of LPG, of around $1,100 a tonne, in the international market is highest in two years. For the oil companies, this translates into more spending whereas the retail price remains the same.
The total consumption of LPG in the country in 2011-12 was 14.9 million tonnes, which was a 7.5 per cent growth over the previous year. Around four million tonnes are imported.
The LPG cover available with the bottling plants range between two and four days in the south and around six in other parts of the country. “It is a hand to mouth situation in several plants in Tamil Nadu,” sources in IOC said. Other reasons cited for the shortage include planned and unplanned shutdown of refineries and LPG.