- Most worryingly, the increasingly apparent belligerence from the Iranian leadership because of the US/Israel joint attack has further exacerbated the already tense global community. Soon after the US/Israel attacked Iran in a coordinated fashion with not-so-convincing reasons about Tehran planning to attack the former, the whole world woke up to yet another conflict that will only add to the prevalent tensions over a few meandering conflicts. Expectedly, Iran has not meekly submitted itself to the US/Israeli adventure but has gone about attacking the neighbouringcountries with great intent, fully knowing to hurt where it most hurts. The primary concern of the whole universe will be the anticipated pressure on various fuel supplies.
PC: Samco
- How to effectively tide over the looming crisis? The war in Iran has cut off the bulk of India’s gas imports. Pain will be felt from kitchens to factories, but is there a way out? Qatar, the world’s third-largest LNG exporter, shut down production after an Iranian attack. In one stroke, 20% of the world’s LNG supply switched off. Qatar said it would need at least a month to resume production, but the way Iran’s targeting it, there were multiple explosions over Doha in a day recently, it might take longer. That’s worrying everyone; gas prices in Europe rose 54% last week. India is affected because it gets 40% of its imported LNG from Qatar. The crisis boils down to price and availability. With contracted supplies unavailable, India must buy at higher rates in the spot market.
PC: The Business Times
- Note that the gas that cost $10 a few days ago is now going for $25. Consider how India uses gas, and the problem becomes evident. The largest share (28%) goes to fertilisers such as urea. City gas demand, which includes PNG for kitchens and CNG for cars and buses, comes next and is growing the fastest. Lastly, natural gas powers power plants and industry. At its current high price, using gas to make electricity doesn’t make sense. Fertilisers are vital, but other industries, such as glass and ceramics, cannot ignore energy prices. That leaves city gas, to which the government has given the highest priority. Even if all gas imports halt, our kitchen and our car have first claim on India’s domestic gas production, which meets roughly half of annual demand.
PC: Free Press Journal
- But that won’t insulate us from high prices, as PNG and CNG suppliers blend their domestic gas quotas with imported gas. This could hurt our pocket, and if the crisis persists, it might reshape India’s auto industry. Last year, for the first time, CNG cars outsold diesel cars, accounting for 21% of the market. This is good for air quality, but high CNG prices and even longer queues at pumps will dull demand. There’s a parallel crisis of LPG, the older kitchen gas still used by 33cr consumers. India imports 60% of its LPG, mostly from W Asia. So, the longer the Iran war lasts, the more households will suffer. Unless the Centre and states absorb increased costs, which is fiscally imprudent. Hopefully, the crisis will blow over sooner. Till then, let’s keep our fingers crossed.
