Govt raises waiting period for booking LPG cylinder; petrol, diesel price hike not on cards yet

A continued freeze in pump prices is expected to blunt the inflationary impact of the oil price spurt. Petrol and diesel prices have effectively been flat since April 2022, with the public sector oil retailers taking losses when global prices jump, and recouping them when they fall. “The OMCs have done well financially over the past few years and they are in a comfortable position to take some temporary pain to protect the Indian consumer from high energy prices…Is the price of petrol or diesel at the retail outlet going to rise in the foreseeable future? It is unlikely to happen,” said a senior government official.

The official, who spoke on the condition of anonymity, reiterated that there are sufficient stocks of crude oil, petrol, and diesel in the country for the time being, and there is no cause for panic. Last Tuesday, government sources had indicated that India had six-eight weeks of crude and fuel stocks, which would be replenished on an ongoing basis with supplies from other regions being increased. As refineries continue to process crude, produce fuels, and get more oil from regions other than West Asia, these stocks will keep shifting, and the effective coverage would be extended, they had said.

As for cooking gas, or LPG, whose stocks are relatively lower than oil, petrol, and diesel, and alternative suppliers are in faraway geographies like North America, the government is taking measures to ensure uninterrupted supplies to households, they said. The minimum waiting period for booking a domestic LPG cylinder refill increased from 21 days to 25 days to prevent hoarding and creation of artificial scarcity in the market, according to sources. They said that going by LPG consumption rates by households, they require a cooking gas cylinder every six weeks or so, and the 25-day booking limit should be a comfortable one.

The government invoked emergency powers derived from the Essential Commodities Act to direct Indian refiners to maximise LPG production and ensure that all the gas is supplied solely to domestic LPG consumers and not used to produce petrochemicals. Moreover, LPG supply to households is being prioritised by refiners over supplies to commercial users of the fuel, which could lead to tightness in commercial LPG supplies in certain pockets, industry sources indicated.

There have been some reports of gas shortage hitting commercial and industrial users from various parts of the country. For instance, the Bangalore Hotels Association has said that supply of commercial LPG cylinders have stopped, which would result in its members shutting shop on Tuesday. A number of ceramic units in Gujarat’s Morbi have also reportedly become non-operational due to inadequate availability of propane—a constituent of LPG—and liquefied natural gas (LNG), both of which they consume.

To address the concerns of commercial and industrial users of LPG, the Ministry of Petroleum and Natural Gas (MoPNG) announced a committee.

“In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use. The ministry has prioritised domestic LPG supply to households and introduced 25 day inter-booking period to avoid hoarding/black marketing. Non domestic supplies from imported LPG is being prioritised to essential non domestic sectors such as Hospitals and Educational institutions. For LPG supply to other non-domestic sectors, a committee of three EDs (executive directors) of OMCs (oil marketing companies) have been constituted to review the representations for LPG supply to restaurants/hotels/other industries,” the MoPNG posted on X late Monday.