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Why India’s LPG demand hasn’t fallen despite the lockdown

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Railway wagons carrying liquefied petroleum gas (LPG) and stable natural gasoline stand at sidings near the new ZapSibNeftekhim plant, operated by Sibur Holding PJSC, in Tobolsk, Russia, on Thursday, Jan. 24, 2019. ZapSibNeftekhim is set to become the largest modern petrochemical facility in Russia. Photographer: Andrey Rudakov/Bloomberg


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Singapore: As more than 1.3 billion Indians are forced to stay home and factories are idled amid the world’s biggest coronavirus lockdown, there’s one fuel that’s proving resilient to the resulting plunge in energy demand.

Liquefied petroleum gas — used for cooking at home in India and other Asian countries — has avoided the collapse in consumption that’s hit gasoline and diesel. It’s also benefiting as authorities stock up on supplies for lower-income people, while production of LPG — a byproduct of oil refining — is falling as processors wind down activities to cope with lower overall demand for fuels.

India’s three biggest state-owned refiners projected a 40% jump in demand for the gas in the first week of April from a year earlier, according to company officials who asked not to be identified, compared with 70% slumps for diesel and gasoline. The processors — Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. — have cut run rates by as much as half due to the lockdown, which has been extended until May 3.


Also read: No matter how you look at it, India’s lockdown-2 can cost as many lives as it will save


Ray of Hope

Regional spot prices are rising and it’s mainly due to prompt import demand from India, said Jeslyn Chua, an analyst at industry consultant FGE. “Even with the lockdown, people there still have to eat and the government has also given free supplies to the poor.”

Indian Oil, Bharat Petroleum and Hindustan Petroleum issued tenders early this month to buy as much as 737,000 tons of LPG for delivery in April, May and June. That’s pushed spot prices to a premium of about $20 a ton over the Argus Far East Index, from a $4 to $5 a ton discount at the end of March, according to two traders of the fuel.

The Indian refiners only managed to purchase just over half of the LPG they were seeking and may issue more tenders soon, according to people familiar with the purchasing plans at two of the three companies, who asked not to be identified as the information is private.

The processors agreed to pay as much as $50 a ton over Saudi Arabian contract prices for deliveries in April and May, the people said. That compares with a $10 a ton premium for LPG paid by Bharat Petroleum in November.

India will likely lose about 90,000 barrels a day of domestic supply of LPG this quarter due to run cuts, while demand will grow by 78,000 barrels a day from a year earlier as the government gives 80 million free refill cylinders to the poor, FGE said in a note released Wednesday.

Indonesia’s PT Pertamina has also sought 90,000 tons of LPG for this month and next. Southeast Asia’s largest economy is buying spot cargoes of the fuel in anticipation of an increase in demand during Ramadan, when Muslims prepare elaborate meals to break their daily fasts, Chua said. The holy month starts in late April this year.

India — where FGE estimates 97% of LPG demand comes from residential consumers — already imports around half of its annual needs. However, the lower local production is forcing refiners to seek more from abroad, with Indian Oil set to import 50% more than normal in April and May.

The LPG market is likely to tighten further after the world’s biggest producers agreed to cut output as output of the gas correlates with oil-processing levels. Indian processors will probably import around 30 cargoes a month in April and May and 26-28 shipments in June, FGE’s Chua said. -Bloomberg


Also read: The historic oil price truce among OPEC+ countries won’t last


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Andhra doctor, suspended for alleging PPE shortage, now beaten by cops for ‘creating nuisance’

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doctor with a stethoscope
A doctor with a stethoscope (Representative image) | Pixabay


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Bengaluru: A doctor with a government hospital in Andhra Pradesh, who was suspended for questioning the shortage of PPE kits, was admitted to a mental health facility Sunday, a day after he was allegedly manhandled by the police and arrested for creating nuisance in Visakhapatnam.

Dr Sudhakar Rao, a government civil surgeon, was beaten, his hands tied behind his back and dragged by police officers Sunday. During the incident, Sudhakar allegedly verbally abused the Jagan Mohan Reddy government in an inebriated state. Videos of the incident have since been widely shared online.

“The police control room received a call about a person creating nuisance on Beach Road Hospital in Visakhapatnam. The Fourth Town police was rushed there and found that the person was the suspended doctor, Sudhakar.

“When the police tried to control him, he snatched the mobile phone of an officer and threw it away. He is suffering from mental disorder and he was drunk. He was sent for a medical examination,” Vishakapatnam Police Commissioner R.K. Meena told the media Sunday.

Sudhakar was admitted to a mental hospital Sunday after doctors at the King George Hospital in Vishakapatnam said he suffered from anxiety.

“Since the doctor is in anxiety and talking irrelevant things, I have referred him to a mental care hospital in Visakhapatnam,” said Dr Radha Rani, medical superintendent, King George Hospital.

A statement released by the hospital said: “Dr Sudhakar was brought to the KGH casualty ward at 6.30 pm. From the smell, it was found that he was in a drunk condition. Under the influence of alcohol, he did not cooperate with anybody there and kept abusing all. Still, his pulse, BP were checked. Pulse was 98, BP 140/100. Blood samples were sent to forensic lab to ascertain alcohol content in his blood.”


Also read: 6 toilets for 20 houses, inadequate testing: Why Mumbai’s Worli chawls are a Covid hotspot


‘Treatment towards Sudhakar was inhuman’

Sudhakar, who spent more than 10 years at the Narsipatnam Government Hospital in Andhra Pradesh, was suspended from his duties in March after he openly criticised the Reddy government for failing to provide PPE kits and N95 masks to doctors treating Covid-19 patients.

He had alleged that the state government was giving N95 masks and PPE kits meant for doctors to politicians and the police.

A video of Sudhakar criticising the government was also shared widely. In the clip, he can be heard saying: “We are putting our lives at risk here. We are asked to use the same mask for 15 days and a fresh mask will be provided only twice a month.”

Speaking to ThePrint, Dr P. Gangadhar Rao, member of the National COVID Committee of the Indian Medical Association, said the manner in which Sudhakar was manhandled by the police was “inhuman” and “violated” human rights.

“We strongly condemn the way he was taken into custody. He was not carrying a weapon, he was alone, the number of policemen outnumbered him. Why treat him like that? We also saw a video where a policeman beats him with a lathi,” said Dr Gangadhar.

He added that Rao was one of the most experienced anaesthetists the Andhra Pradesh government had.

“Our next step of action is to get Sudhakar to write an unconditional apology for having used filthy language, abusing the chief minister and the government. We will then take our appeal to the CM seeking that he be reinstated,” Gangadhar said.


Also read: Face shields, gowns, masks — the new attire for cabin crew post lockdown


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