India’s LPG crunch won’t ease anytime soon: We need a full-spectrum policy response

Liquefied petroleum gas (LPG) is one of the products facing a global supply crunch today, thanks to the Iran war. The result is more than a cooking gas shortage in India. In order to prioritize the availability of cooking gas for homes, the government reduced supplies to commercial establishments.

Although strictures were eased a little, scarcity-hit eateries have shut down in several towns and cities.Other impacts have been in evidence too. A large proportion of the urban poor who live in slums and informal rental housing fail to qualify for LPG supply from oil marketing companies, leave alone subsidized connections under the Centre’s Ujjwala Scheme; they mostly buy their LPG in 5kg cylinders filled with gas meant for commercial use and have been the worst affected by the current shortfall. Migrant workers employed by eateries starved of LPG have found themselves out of work.

Like other migrant workers, many have struggled to keep kitchen stoves running. Faced with livelihood losses and unaffordable means of cooking food, many are headed back home from their cities of employment. The LPG dislocation has been so sharp, it could take weeks to recover from it even after supplies normalize—for which the war must end and the Gulf’s hydrocarbon facilities repaired.

India is staring at an LPG scarcity that could stretch from the short to medium term.One way out is for LPG production at domestic refineries to rise. This can be achieved through tweaks of the usual refining process and the use of catalysts. Of course, refiners would have to forgo some of their high-value petrol output in favour of LPG.