India to prioritise domestic fuel demand amid neighbours' requests

New Delhi: With many countries facing severe fuel shortages due to the West Asia conflict, the Central government on Wednesday said that India would prioritise meeting the domestic fuel demand before considering supply requests from countries such as Bangladesh and other regional buyers.

"The domestic fuel demand has to be met first. If there is a surplus after meeting all of the domestic demand, a decision can be taken by the appropriate authority," Union Ministry of Petroleum and Natural Gas Joint Secretary Sujata Sharma told reporters here.

She said ensuring adequate domestic availability was the primary focus, with exports to be evaluated only after internal demand was fully met.

Several neighbouring nations — including Bangladesh, Sri Lanka, and the Maldives — have requested emergency fuel supplies from India to mitigate shortages caused by the West Asia conflict.

Bangladesh sought diesel in excess of the 5,000 tonnes it receives via a pipeline under an existing arrangement. Sri Lanka and the Maldives have also sought additional fuel supplies from India.

India also supplies fuels like petrol, diesel and LPG to Nepal and Bhutan. Nepal has reportedly requested an additional 3,000 tonnes of LPG each month.

India has surplus refining capacity: It makes fuels more than its annual consumption. The surplus is exported.

However, the West Asia conflict has disrupted supplies of crude oil — the raw material — as well as products like LPG.

India imports about 88% of its crude oil, 50% of its natural gas, and 60% of its LPG requirements.

Before the war broke out, more than half of the crude oil India imported came from countries like Saudi Arabia, Iraq, and the UAE, which used the Strait of Hormuz for shipping. As much as 85-95% of LPG and 30% of natural gas came through the strait.

With the strait now blocked, India has managed to partially meet its crude oil demand through alternative sources, such as Russia, West Africa, the US, and Latin America.