Hotels and restaurants closed, shortage of gas and LPG: Iran war impact on India, what follows next?

Bengalore , Chennai, Mumbai hotels flag cylinder shortage and LPG price rise. 20% of hotels closed in Mumbai – India starts facing the consequences of Iran war. People are now advised to search for alternative fuel sources.

EFFECTS OF WAR IN INDIA

The price of LPG cylinders has increased last saturday. This is due to the Iran-Israel conflict that has caused disruption in key energy shipping routes in the Middle East.

It’s a crisis that 20% of Mumbai hotels are already shut if this continues then 70% will follow. Many cities in India such as Nagpur, Delhi, and Bengaluru, are already dealing with “gas rationing”. As restaurants and hotels shut down daily wage workers -waiters and cleaners- are already facing job losses.

Chennai and Bengalore have reported loss of commercial gas . They declared if this continues they will be unable to hold up commercial services much longer.

The Qatar Energy, the world’s largest producer of liquified natural gas, has invoked “Force Majeure”. This means no country can question Qatar for any economic problem if it later shuts LPG supply.

Hindustan Corporation limited wrote a letter, addressing that “the current geopolitical situation has impacted LPG production” . They may have to face limitations in continuing LPG supplies to industrial and commercial customers. For the time being they have advised to “search out for alternate fuel supplies” to meet daily fuel requirements.

MEASURES TAKEN BY THE GOVERNMENT

It’s a new reality that we can’t book a second cylinder before 25 days. The Ministry has stated, they have “prioritized domestic LPG supply to households and have introduced 25 day inter-booking period to avoid hoarding and black marketing of LPGs and cylinders”. Circulars have been generated by the governments for the same.

In response to the problem arising, the Ministry of Petroleum and Natural Gas, in a recent meeting with journalists, promised no disruption to occur and will not let crude oil price rise in India, but indeed has inculcated rationalising of gas at the moment. Adding to it, the supplies of imported LPG to essential non-domestic sectors like hospitals and educational institutions, is now being prioritized. The ministry has also recommended oil refineries to increase their LPG production.

In the government’s response, a committee of three EDs of OMCs (oil manuacturing companies) has been created that will review the supply of LPGs for commercial use and find solutions that may occur.

The Parliament is now heating up. While the opposition calls it a “gift of bad policy,” the government insists a 3-member committee is monitoring the “unprecedented war situation.”

THE GLOBAL CHAOS

On the other hand Iran continues to threat that, all European and Asian countries to deploy all Americans, and their diplomats from their countries else no ship will be allowed from the Strait of Hormuz to reach their countries. Whereas Donald Trump’s “The War is Very Complete” statement are causing market whiplash.