Indian Refiners Cut Losses on LPG Sales Amid Supply Crunch
India's state-controlled refiners have seen their losses on LPG sales narrow significantly this month. According to an Indian energy ministry official, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) have reduced their losses nearly threefold in August compared to July.
The revenue loss has decreased from $5.25 per one household cylinder of LPG in July to $1.97 this month, the official said in a written reply to Parliament carried by Reuters. The Indian government compensates fuel retailers for their losses on sales of LPG at below market rates with a lag.
The supply crunch resulting from the war in Iran and the closure of the Strait of Hormuz has forced India to scramble for LPG supplies, which have been trapped in the Persian Gulf. To mitigate this crisis, India boosted imports of oil and LPG from places that don't require the Strait of Hormuz, but costs are usually higher.