India declares emergency over Middle East fuel crisis

India has declared a state of emergency due to supply disruptions caused by the crisis and hostilities in the Middle East. The country's government has instructed oil refineries to maximize the production of liquefied petroleum gas (LPG) to prevent a shortage of cooking fuel. This is reported by UNN with reference to Reuters.

Details

An order issued on the evening of March 5 instructs all refineries to "maximize and ensure the use of their available propane-butane for the production of liquefied gas."

The government also instructed producers to provide liquefied gas, propane, and butane to state-owned refineries - Indian Oil Corp, Hindustan Petroleum Corp, and Bharat Petroleum Corp - for distribution to households.

As noted in the Reuters publication, the mandatory redirection of propane and butane for liquefied gas production will lead to a reduction in the production of alkylate - a component for blending gasoline.

At the same time, the redirection of propane and butane to LPG production will negatively affect the profits of petrochemical companies that produce products such as polypropylene and alkylates, as they have a higher price than LPG, notes a source in the trade industry.

Recall

The US Treasury Department issued a license allowing Indian companies to purchase Russian oil at sea. This decision was made to compensate for the fuel shortage caused by the complete closure of the Strait of Hormuz.