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(Bloomberg) — India has invoked emergency powers to redirect supplies of liquefied petroleum gas away from industrial users to households, as it seeks to shield ordinary people from the impact of the Middle East war.
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An oil ministry notification on Tuesday barred refiners — including Reliance Industries Ltd.’s export-oriented unit — and petrochemical plants from using the fuel as a feedstock, while also ordering them to maximize LPG output. That was an expansion of a previous measure targeting other processors.
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LPG cylinders are still found in most Indian kitchens, and industries use the fuel as feedstock for plastic production.
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The move comes as the crisis in the Middle East, from where India sources most of its LPG and two thirds of its liquefied natural gas, shows no signs of easing. Fuel shipments through the Straight of Hormuz, a key chokepoint, are all but halted, and India is now extending measures to protect the more than 300 million households that use LPG.
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Households accounted for roughly 86% of India’s LPG consumption in the 10 months through January, according to oil ministry data. The government raised cooking gas prices on Saturday for the first time in a year and extended the minimum interval between subsidized refills to 25 from 21 days to modulate demand.
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The shortages are already showing up on the ground. Restaurants in parts of the country have halted operations, while a crematorium in the western state of Maharashtra curtailed LPG-based incinerations due to fuel shortage.
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To preserve essential services reliant on LNG, after major supplier Qatar halted production, the government is safeguarding households receiving piped natural gas and the transport sector. Provisions to industries such as fertilizers and manufacturing have also been capped.
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Supplies to petrochemical plants operated by Oil and Natural Gas Corp., GAIL, Reliance, as well as to power plants, will be curtailed or halted altogether.
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The government has also directed gas producers and importers, including ONGC, Reliance and Oil India Ltd., to disclose detailed information on stock levels and allocations, as New Delhi tightens oversight to manage one of its most severe energy disruptions in years.
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