India boosts commercial cylinder allocation to 70% as global tensions disrupt supply

Amid global tensions, India ramps up commercial LPG supply to support businesses, while ongoing shortages and rising costs continue to strain households and disrupt daily operations across several regions.

India has been facing an LPG crisis ever since the recent tensions between US and Iran took a toll on supply routes across the world. The Centre has increased allocation for commercial cooking gas cylinders to contain the shortage brought on by disruptions in international supply routes. Commercial LPG customers can now get up to 70% of their pre-crisis quota. Industries dependent on commercial cooking gas cylinders have got some respite with the Centre’s decision.

Why Is India Facing an LPG Crunch?

Disruptions to international shipping lanes due to heightened US-Iran tensions have created a problem for India, which imports almost 60% of its LPG requirement, of which more than half comes from the Middle East.

Higher freight costs and shipping delays or routes remaining closed because of conflict have meant supply disruption. Several states across India have witnessed waiting periods of up to several months for a refill, panic buying, and cylinders being sold on the black market at exorbitant prices.

Restaurant Owners Worst Hit, Measures Taken

Commercial consumers, especially those running restaurants, food processing units, bakeries, and small businesses that cook food on a large scale, have been the worst hit. Several restaurants across cities have had to shut down operations temporarily or switch to firewood or electric-based cooking methods.

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To tackle shortage issues and panic-buying across several states, the government has announced that commercial LPG users would get a higher allocation. As part of the measures announced, the Centre will hike allocation for commercial LPG cylinders by 20%, bringing it back to around 70% of their normal quota.

Centre has also directed states to prioritise customers that run essential services while keeping a tight leash on distribution companies and ensuring hoarding doesn’t take place.

Prices Shoot Up, Consumers Panic

Supply shortage comes with another wrinkle – LPG prices have also gone up in the last few weeks. Prices for commercial cooking gas cylinders have witnessed a steep increase over domestic cylinders. Higher fuel prices globally have meant that input costs have gone up for businesses just as India faces higher inflation.

Fuel Supply: Centre Says Crisis ‘Under Control’

Even as panic-buying and scarcity looms large across India over commercial LPG shortages, the Centre has said that India’s fuel supply isn’t impacted. The Centre has stated that India has enough buffer stocks to tide over disruptions and is looking to source oil from countries other than the Middle East.

With Iran conflict far from over, disruption to shipping routes may continue affecting supply and prices may remain high till tensions ease.

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The Times Of Bengal