Oil firms to maintain LPG production

Oil firms to maintain LPG production

Oil firms to maintain LPG production

Reliance Industries and Essar Oil, along with state-owned refiners, are likely to maintain a minimum level of LPG production to ensure uninterrupted supply of cooking gas to the public. 

High value petrol and diesel production has led to reduction in LPG production. This happened mainly due to the freedom given to refiners to change product profile.

But the government’s commitment to increase LPG penetration in the country to 75 per cent of the population by releasing 5.5 crore new connections by next year may not be fulfilled if the LPG output declined in the country and imports were resorted to.

To meet this deficiency, the Oil Ministry had sought Law Ministry’s opinion if the government can, under the Essential Commodities Act of 1955, ask both public and private sector oil refineries to produce a certain volume of LPG. 

The law ministry contended that the government can mandate under (Essential Commodities) Act a minimum percentage of LPG production from all the refineries.

Against a projected demand of 16.5 million tonnes, indigenous availability of LPG is only 10.4 million tonnes during the current fiscal. The remaining 6.5 million tonnes is being met through imports.