India Shifts LPG Supply Strategy Towards Angola Amid Middle East Tensions
India's New Energy Strategy
When faced with obstacles, wise nations seek alternative routes. With ongoing conflicts in the Middle East, threats in the Strait of Hormuz, and a gas shortage impacting households in India, a significant shift is on the horizon. India is taking a major step to reduce its reliance on Gulf countries by looking towards Angola, a lesser-known African nation, for LPG supplies. The pressing question arises: why Angola? Will this decision alleviate the gas crisis? Could this be a pivotal moment for India's energy strategy? The backdrop includes the Iran conflict and rising tensions in the Hormuz Strait, which pose a serious challenge to India's energy security. Currently, India imports approximately 92% of its LPG from Gulf nations such as the UAE, Qatar, Saudi Arabia, and Kuwait, all of which rely on the narrow Strait of Hormuz, just 33 km wide. This strait is crucial as it facilitates around 20% of the world's oil and gas trade. A blockade here could directly impact Indian households.
Negotiations with Angola
In response, Indian public sector companies, including Indian Oil, BPCL, and HPCL, are engaging in discussions with Angolan state-owned firms to procure LPG. Reports indicate that India is considering a long-term agreement, aiming to diversify its sources of supply. Historically, India has engaged in oil trade with Angola, and notably, shipments from Angola will not pass through the Strait of Hormuz, instead arriving via the Atlantic and Arabian Seas. Experts suggest that gas from Angola could reach India in just 12 to 18 days, significantly faster than supplies from the U.S., which take 10 to 15 days longer. This means quicker deliveries with reduced risks and better options. To illustrate, in the fiscal year 2024-25, India consumed 31.32 million tons of LPG, while domestic production remained stagnant at about 12.79 million tons, necessitating substantial imports to meet rising demand.
Government Measures for Energy Security
The government has also announced measures to ensure the supply of petroleum products and LPG in light of potential closures of the Hormuz Strait. The Ministry of Oil and Gas stated that all refineries are operating at full capacity and that there is a sufficient stock of crude oil. Additionally, the ministry has instructed city gas distribution companies to prioritize providing PNG connections to both residential and commercial consumers, including restaurants and hotels, to alleviate concerns regarding the availability of commercial LPG. Furthermore, the duration of the National PNG Drive 2.0 has been extended until June 30, aimed at enhancing the PNG network, which was initially launched on January 1 and was set to conclude on March 31.