LPG Supply Crisis Worsens, Gas Prices Jump 50%  

LPG Gas Prices: The joint US-Israeli offensive against Iran has triggered a fresh global crisis. India is also feeling the effects of this conflict. Iran has declared the closure of the Strait of Hormuz, leading to a new challenge in the energy sector. If this war persists for an extended period, India could face a significant LPG shortage. Additionally, new sources will need to be identified for petrol and diesel. A report indicates that European gas prices have surged by 50 percent.

Will LPG prices rise?

The most significant repercussions of the Iran-US conflict will be on LPG. India relies on Arab nations for 80 to 85 percent of its total LPG supply, all of which passes through the Strait of Hormuz. As a result, India is confronted with a considerable LPG shortage. Unlike crude oil, India lacks substantial LPG reserves. Thus, to prevent any LPG-related issues, it is crucial that supplies remain consistent.

Similar to LPG, there are no considerable reserves for LNG. At present, the country imports 60 percent of its LNG requirements via the Strait of Hormuz. Therefore, India will soon need to seek new alternatives for both LPG and LNG.

Qatar suspends LNG production

In the wake of the Iranian drone strike, Qatar has ceased operations at the world’s largest LNG export facility. Currently, Qatar ranks as the fifth-largest LNG producer globally. Consequently, a reduction in production will negatively affect supply.

Sufficient reserves for Petrol and Diesel

India does not need to be overly concerned about petrol and diesel supply at this moment. The country currently has reserves that can last for 70 to 80 days. Last month, India secured a significant quantity of crude oil from Saudi Arabia. However, in light of the new circumstances stemming from the Iran conflict, India may prioritize sourcing from the United States, Russia, and other nations.

It is important to note that due to the Iran-US war, crude oil prices are anticipated to increase. In the future, crude oil prices could potentially reach $100 per barrel. The government is showing considerable activity on this issue. On Monday, the Petroleum Department hastily convened a large meeting. The government is assessing the situation and exploring new options.