India's LPG imports rose on the year in February, with shipments mostly from the Middle East, according to data from oil analytics firm Vortexa.
The rise was likely driven by higher domestic use of the cooking fuel compared with a year earlier when Covid-19 weighed on demand.
Imports totalled 2.07mn t in February, up by 25pc from a year earlier when India was battling the Omicron variant. This pushed down cylinder refill rates among low-income consumers, especially those that were left in a worse financial position as a result of Covid-19.
The UAE was the top Middle East supplier to India in February, with deliveries of 602,100t, up by 26pc on the year, followed by shipments from Qatar and Kuwait that rose by 35pc and 20pc to 580,400t and 199,500t respectively. But shipments from Saudi Arabia fell by 20pc on the year to 381,200t.
The Middle East is India's main LPG supplier. Deliveries from the region accounted for 88pc of India's total imports during the month, stable from a year earlier.
The US was India's second-biggest supplier in February, although imports fell by 33pc on the year to 92,700t. India took the lowest volumes of February LPG from Malaysia, China and Taiwan at 10,900t, 5000t and 2,800t respectively.
But India's total February imports fell by 5pc on the month following a sharp rise in state-controlled Saudi Aramco's contract price (CP) last month. Aramco's February propane CP rose to a nine-month high of $790/t, while its butane CP was $185/t higher from January at $790/t, which rendered the propane-butane CP spread at parity. If this trend is followed in March, imports are likely to rise as Aramco has cut its March propane and butane CPs.
India's LPG demand could come under pressure this year as the government has removed LPG subsidies for low-income households in its budget for the 2023-24 fiscal year starting in April. Consumers under the government's Pradhan Mantri Ujjwala Yojana (PMUY) subsidy scheme may switch back to harmful solid cooking fuels if they are unable to afford higher LPG prices.
Indian oil marketing companies raised the price of domestic LPG cylinders on 1 March after holding them steady in the past seven months, while commercial cylinder prices were lifted by Rs350, continuing their uptrend since January.
