India Rationing Gas Supply to Industries Amid Supply Concerns

Alanbatnews -

India is set to ration natural gas supplies to domestic industries, several Indian firms announced on Tuesday, amid concerns over potential supply disruptions from the Middle East.

The move follows production halts in Qatar, a major global energy supplier, and disruptions to oil and gas shipments through the Strait of Hormuz due to ongoing regional tensions, sources said. These developments have triggered a surge in global energy prices and shipping costs.

Petronet LNG, India's largest gas importer, has reportedly informed GAIL and other companies about the supply reduction. India is the largest customer for Abu Dhabi National Oil Company's (ADNOC) liquefied natural gas (LNG) and the second-largest buyer of Qatari gas.

GAIL and Indian Oil Corporation (IOC) notified their customers late on Monday about gas supply cuts ranging from 10 to 30 percent, according to sources. The reduction has been set at the "minimum quantity take or pay" level, a measure designed to protect suppliers from paying compensation to customers under contractual terms.

To mitigate the shortfall, Indian companies, including IOC, GAIL, and Petronet, are planning to issue spot tenders in the market. However, they face challenges due to record-high spot prices, shipping costs, and insurance premiums resulting from the current situation.