BENGALURU, India: Ganesh Kumar first felt the effect of the US-Israeli conflict on Iran when his morning thosai went off the menu at his neighbourhood breakfast restaurant in Bengaluru.
With the shortage of cooking gas, breakfast restaurants – called darshinis in the south Indian city – have stopped making thosais and vadais, which need high heat.
“I know it’s not a big deal compared to lives and homes lost in a war, but my thosai disappearing made me pay more attention to a war far away,” said Kumar, 39, an accounting teacher.
At home, his wife placed an order to replace a 14.2kg gas cylinder with the government-run Indane cooking gas distributor the minute she saw news that Indian ships carrying liquid petroleum gas (LPG) were struggling to pass through the Strait of Hormuz.
Tehran controls access to the maritime chokepoint.
“We have two kids and an elderly person living with us. We can’t go even one day without cooking gas,” said Ashwini Ganesh, 35.
The supplier told her that while he had cylinders, an overnight spike in orders from households had led to a weeks-long waiting list.
India imports 60 per cent to 65 per cent of its LPG, with 90 per cent of it coming from West Asia and through the Strait of Hormuz.
With the hostilities intensifying there, Indians are experiencing cooking gas shortages in homes, hotels, canteens and community kitchens.
Several reports have surfaced over the past week of arrests and cylinder seizures by the authorities in various parts of the country. In Karnataka, for instance, the Food and Civil Supplies Department seized more than 300 cylinders being hoarded or sold at surge prices.
But with assurances from the Indian government that there is sufficient stock of LPG, it is unclear whether the disruption is due to inventory shortages, hoarding by black marketeers or panic buying by consumers.
While some hoarding or diversion can emerge when markets tighten, it tends to be localised and not sufficient to drive widespread disruption on its own, said analysts.
While India’s diplomatic engagement with Iran and discussions with distributors have improved supply, the situation is still “fragile”, said Manish Sejwal, the Delhi-based senior vice-president of Rystad Energy.
He added that India had “low inventory buffers” of only around 10 days that limit its ability to absorb short-term shocks.
“Any setback in diplomatic progress or delays in securing the incremental spot cargoes (purchased outside of contracts) could quickly reintroduce tightness,” he said.
“The country’s high reliance on LPG imports means that any disruption or delay along key shipping routes can create temporary mismatches between supply and demand.”
Nationwide shortages
When supplies were disrupted by the closing of the Strait, the government decided to give priority to domestic use and critical services, with hospitals and educational institutions at the top of the allocation list, while discretionary consumption segments such as restaurants and eateries were deprioritised.
Many Indian cities saw panic booking and long queues for LPG cylinders. In Uttar Pradesh, violence broke out between customers and a distributor over price hikes.
The sudden halt in the supply of commercial gas cylinders has forced many of Bengaluru’s 40,000 hotels to cut down on high gas-consuming menu items such as Chinese fried rice, which needs high wok heat, and ration fuel to stretch their remaining cylinders, said the Bengaluru Hotels Association.
Hotels that manage to get cylinders at a premium from distributors are passing the cost on to customers. A masala thosai that is usually priced at 45 rupees (48 US cents) to 60 rupees now costs 100 rupees in some places.
Eateries like the state assembly house’s canteen in Himachal Pradesh have switched to wood stoves.
In Peenya, one of the country’s biggest industrial estates in Karnataka, irregular commercial gas supply threatens to slow down or even shut down 3,000 small and medium factories, said the factory owners’ association.
India’s top metals conglomerate, JSW Group, said disruptions to fuel supplies and maritime operations were starting to affect its operational stability and supply chains. One unit faces a potential shutdown in the coming days, Reuters reported.
Migrant workers in Surat – the diamond and textile hub of Gujarat – are going home in droves to Uttar Pradesh, Bihar, Jharkhand, Uttarakhand and Odisha, as many cannot afford to refill their domestic gas cylinders at the premium distributors are charging.
“We used to get our small cylinders refilled for 500 rupees from a small gas seller, but he is charging 2,500 rupees now. That’s unaffordable for us. If I return to my village, I can cook with firewood, which is difficult to find in a city like Surat,” said Deepanjan R., 23, a textile mill worker from Jharkhand, who was going home with his wife and child on March 18.
“Many workers don’t have an LPG cylinder registration because they live in rented houses,” Jitubhai Vakharia, president of the South Gujarat Textile Processing Association, told The Indian Express.
“Some mills are shutting down for one or two days every week as many workers have left.”
Middle-class families all over the country are, meanwhile, rushing to buy electric induction stoves, in case gas stocks run out.
“Just a week ago, few customers used to buy induction stoves because the low heat was not conducive to all kinds of Indian cooking, but their fortunes have changed,” said the store proprietor of Deepak Stores in the Jayanagar 4th-block market in Bengaluru, who did not want to be named.
TTK Prestige, a major kitchen appliance company, issued a front-page newspaper advertisement on March 15 that said, “Some cylindrical problems need rectangular solutions”, referring to the induction stoves.
Studies show that an induction stove would consume 70 to 80 kilowatt-hours of electricity a month with daily use. At average electricity rates of 7 to 8 rupees per kilowatt-hour, it will cost 490 rupees to 640 rupees, which is cheaper than cooking on LPG, which costs around 900 rupees per domestic cylinder.
Around 75 per cent of India’s electricity is generated from coal.
LPG ships in Hormuz
A total of 22 Indian-flagged vessels were stranded on the western side of the Strait of Hormuz, when Iran restricted access in mid-March. Of these, six were carrying LPG.
The Indian government has reportedly been in talks with the Iranian authorities for the safe passage of the six vessels and two crude oil carriers to help tide the country over the short-term crunch.
The LPG tankers carry a total of about 270,000 tonnes of cooking gas, enough to fill around 1.9 million domestic cooking gas cylinders – the equivalent of three days of consumption.
More than 330 million Indian households are registered for cooking gas.
This week, two of the six Indian-flagged LPG vessels – Shivalik and Nanda Devi – reached India’s western coast, escorted by the Indian Navy.
But at least 24 to 29 LPG tankers, carrying 46,000 tonnes each, are required each month to meet India’s needs, according to financial services company Motilal Oswal.
The Indian government is looking for alternative sources in a wide range of countries, from Morocco to Belarus. Meanwhile, refiners are also ramping up LPG production, forgoing other downstream products, including petrochemicals.
However, “Indian refineries would not be able to meet the growing demand of 2.9 million tonnes in 2027, even with a 30 per cent to 50 per cent increase, resulting in a shortage of 1.4 million to 1.9 million tonnes”, according to a Motilal Oswal analysis.
“Alternative sources are available, but travel times are materially longer. Cargoes from the US Gulf Coast take around 40 days to reach India, limiting near-term flexibility,” said Sejwal.
“India could face near-term supply tightness and in a severe disruption scenario, shortages and potential rationing cannot be ruled out,” he added. - The Straits Times/ANN
