The Telegraph
Since 1st March, 1999
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Polls fuel surge in LPG imports

New Delhi, Sept. 24: If the lowly onion could bring down a BJP government in Delhi, LPG is clearly a far more explosive substance.

With elections to four states, including Delhi, round the corner, the government is not willing to take any chances on a shortage of cooking gas that could mar the BJP’s poll prospects.

Sources disclose that with this in mind, the national oil companies have tripled imports of LPG to 1.5 lakh tonnes per month for October and November. At the current market price of $300 per tonne, the monthly imports will work out to around $45 million.

During the current financial year, only 40,000 tonnes of LPG were being imported each month. This constituted about three shiploads of LPG which landed on Indian shores every month. The sharp increase in imports will see around 10 to 12 ships bringing in the cooking gas each month.

The BJP has still not forgotten how the onion shortage in the capital led to the poll debacle in the Delhi state elections.

The government, therefore, wants to ensure that there is no shortage of essential goods this time around. Keeping this in mind, it wants to top up its fuel tanks so that it can meet any exigency.

The higher imports have also factored in the fact that there will be some maintenance shutdowns in a domestic refinery and the demand for cooking gas increases in the winter months.

LPG also constitutes the weak link in the hydrocarbon chain as the storage capacity vis-a-vis the demand is relatively less than that of the other petro goods such as petrol, diesel and kerosene.

Although the domestic refineries produce surplus quantities of petrol, diesel and aviation fuel, LPG is still in short supply.

Considerations of realpolitik have already prevented the government from increasing the price of cooking gas and kerosene despite soaring international prices. The price of LPG would have to be raised by Rs 105 per cylinder and that of kerosene supplied through the public distribution system by Rs 3 per litre if the official laid out economic reforms policy was to be followed.

The official policy clearly states that subsidy on these two cooking fuels will be phased out and their prices linked to international prices.

Earlier this month, the government had reiterated its resolve to maintain the price line of LPG and kerosene by announcing that the prices of these fuels would not be raised for another year and the subsidy period would be extended by another two years.

Harsh political realities have clearly taken precedence over hard economics.

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