India has purchased its first cargo of Iranian liquefied petroleum gas (LPG) in years after the United States temporarily removed sanctions on Tehran’s oil and refined fuels, Reuters reported citing three industry sources.

India had shunned energy purchases from Iran in 2019 under pressure from Western sanctions. The tanker was initially bound for China, according to LSEG data.

Sanctioned tanker Aurora carrying Iranian LPG is expected to shortly reach the west coast port of Mangalore, the sources said, with LSEG data corroborating the development.

Supply shift after sanctions relief

The Iranian LPG cargo will be shared among Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited.

The cargo has been purchased from a trader, and payment will be made in rupees, the sources said, adding that India is exploring buying more Iranian LPG cargoes.

Still, an official said he was not aware of Iranian cargoes being bought.

"(There are) no loaded cargoes from Iran, we have not heard of that," said Rajesh Kumar Sinha, special secretary in the federal shipping ministry, at a press conference on Wednesday.

India’s LPG demand and supply dynamics

The three companies and India’s oil ministry did not immediately respond to Reuters requests for comments.

India consumed 33.15 million metric tons of LPG, or cooking gas, last year, with imports accounting for about 60% of demand. About 90% of those imports came from the Middle East.

India is gradually moving out its stranded LPG cargoes from the Strait of Hormuz, with four LPG tankers — Shivalik, Nanda Devi, Pine Gas, and Jag Vasant — moved so far.

India is also loading LPG onto its empty vessels stranded in the Persian Gulf.

Meanwhile, a government order has stated that the supply of LPG cylinders to households will be discontinued after three months if consumers do not switch to piped natural gas (PNG) in areas where such connectivity is available.

The order is aimed at accelerating the expansion of the gas pipeline network and reducing reliance on a single fuel source.

The move comes at a time when India is grappling with supply disruptions triggered by the war in West Asia, which has impacted shipments of liquefied petroleum gas (LPG) from key sources.

The government is encouraging households and commercial establishments to adopt PNG, which is supplied continuously through pipelines directly to kitchen burners and eliminates the need for booking refills. 

Source: Moneycontrol 

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