RIL accounted for over a quarter of the country's LPG production of around 8.5 million tonnes per annum (mtpa) last year. Around 2.5 mtpa LPG - the only petroleum product in which India is not self-sufficient - was imported last year to meet the domestic demand of 11 mtpa.
RIL is planning to cut LPG production at Jamnagar from 2.3 mtpa to around 1.6 mtpa from mid-2008 following the grant of export-oriented-unit (EoU) status to the refinery.
LPG imports are already on the rise. Between April and July this year, the country imported 0.7 million tonnes LPG, 49 per cent more than the 0.47 million tonnes a year ago, government data showed.
"The cut in production will further increase imports. We are gearing up by augmenting our import facilities at Kandla," said a senior executive of Indian Oil Corporation (IOC), the country's largest marketer of petroleum products. He said the company had already tied up extra imports. A part of shortfall will be made up by Essar's Jamnagar refinery.
LPG is mainly used as domestic cooking fuel and is sold at a highly subsidised rate. About 5 per cent demand comes from industrial users, who are not subsidised. In the transition period, the current shortage of LPG for households is likely to increase.
Consumers in some parts of the country are facing delays in LPG refills. "Time taken for refilling a cylinder is up to five days. New connections are taking at least a month," said an LPG dealer in New Delhi's north district.
Shortage in other parts of the country such as Jharkhand seems to be more acute, with the waiting time for a refills being as long as 20 days. Shortage has also been reported from several places in Andhra Pradesh and Kerala.
Oil marketing companies and the petroleum ministry, however, say enough LPG is available.
"LPG availability is sufficient. But huge diversion of subsidised domestic LPG for use in automobiles, hotels, restaurants and street-side stalls is resulting in shortage for domestic users," said a senior industry official.
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