India signs deal with Iran to import LPG

The Dollar Business Bureau

With the demand rising in the country for cooking fuel, India for the first time signed a deal for importing liquefied petroleum gas (LPG) from Iran.

The Government-owned oil companies will import 44,000 tonnes or one very large gas carrier (VLGC), per month initially for a period of six months, according to industry sources.

Every month, India has to import around a million tonnes of LPG in order to meet the growing demand which has further been driven by the government initiative to provide free connections of gas to poor women.

In 2016-17, consumption of LPG in India increased by 9.8% to 21.55 million tonnes. Out of this, the country had imported 11 million tonnes.

India largely imports LPG through term contracts from major producers of Middle East including Saudi Aramco, Abu Dhabi National Oil Co, Qatar’s Tasweeq and Kuwait Petroleum Corp.

LPG imports will increase to 16-17 million tonnes over the coming three years as the government is pushing to make available cooking gas to the poor and prevent them from using polluting fuels, the sources said.

India is also looking to import LPG from Bangladesh.

In 2015-16, the country’s LPG imports stood at 8.8 million tonnes.

Last year imports made India the second-largest importer of LPG in the world, after China.

The demand for LPG is estimated to rise by 9.7% to 23.7 million tonnes in this fiscal of 2017-18 and is expected to reach 35 million tonnes by 2031-32.

During the last fiscal ended March 31, a record number of 3.45 crore connections for LPG were given, including 2.2 crore connections given free to poor women.

The government has set a target to give out around 3 crore LPG connections that include 1.5-2 crore connections under the free scheme during the fiscal 2017-18 and 4 crore connections the following year.