To streamline LPG availability for Indian households, a new plan is being considered. As per industry reports, households may soon receive 10 kg cylinders instead of the standard 14.2 kg refill. However, this move is likely to increase delivery pressure on oil companies.
The plan
To manage supply disruption, oil companies are planning to introduce smaller 10 kg cylinders. The idea is simple serve more households with limited supply. As the Israel-Iran war is intensifying, companies are under supply pressure. Therefore, there are looking for resolve.
The constraints
While smaller cylinders will increase the number of units available, they will also raise demand frequency. A 14.2 kg cylinder usually lasts more than a month. But a smaller cylinder may run out faster. This could increase delivery pressure and leave distributors struggling.
Bottling plant alignment
To supply smaller cylinders, bottling plants will need to recalibrate their weighing systems. A sudden change in cylinder size may also lead to confusion, protests, and political pushback. However, with the war continuing and supply pressure rising, companies may have no option but to reduce size.
The tightening situation
As the war continues, supply disruptions in the Gulf are worsening. Reports suggest that Iran has attacked gas facilities in countries like Qatar and Oman. Companies fear they may not be able to sustain operations for long. With no new shipments arriving, stocks are depleting rapidly.
Government concern
The government has repeatedly said the LPG supply situation is critical. It is currently following a conservation strategy while ensuring regular supply to households. After initially halting supplies to commercial users, around 40% of pre-war allocation has now been restored.
Indian imports
India imports around 60% of its LPG requirement. Nearly 90% of this comes from the Gulf region. However, the blockage at the Strait of Hormuz, which handles about 20% of global oil and LNG supply, has disrupted shipments since March.
