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India Gazette
17-05-2025
- Business
- India Gazette
Oil companies losses on LPG expected to decrease by around 45% in FY26 if crude prices remain at USD 65 per barrel: Report
New Delhi [India], May 17 (ANI): LPG losses incurred by oil marketing companies (OMCs) are expected to decrease by around 45 per cent in FY26 if crude oil prices remain stable at USD 65 per barrel, according to a report by CareEdge Ratings. The report stated that the cumulative LPG under-recoveries are likely to reduce significantly next fiscal year, mainly due to a mix of higher retail prices and lower international LPG prices. It said 'Cumulatively, the LPG under-recoveries are expected to decrease by ~45% in FY26 if crude oil prices remain around USD 65/bbl'. These under-recoveries refer to the losses suffered by oil companies when they sell LPG cylinders below their cost price, as prices are regulated by the government to keep cooking gas affordable for households. In India, around 90 per cent of LPG consumption is used for household cooking, while the remaining 10 per cent is used in industrial, commercial, and automotive sectors. Over the last ten years, the number of domestic LPG consumers has doubled, reaching approximately 33 crores as of April 1, 2025. The report mentioned that due to this sharp rise in consumers, LPG consumption has grown faster than domestic production. Indian refiners have not increased LPG output enough to meet demand, leading to a greater reliance on imports. In FY25, around 60 per cent of the domestic LPG requirement was met through imports, compared to about 46 per cent a decade ago. In FY25, oil marketing companies suffered significant LPG under-recoveries of nearly Rs 220 per 14.2 kg cylinder. This resulted in a total loss of Rs 41,270 crore for the three major OMCs combined, putting pressure on their profitability. As a result, the combined profit after tax (PAT) of these companies fell from about Rs 85,000 crore in FY24 to Rs 35,000 crore in FY25. However, the recent hike in retail LPG prices by Rs 50 per cylinder, effective from April 8, 2025, is expected to reduce under-recoveries by 25 per cent in FY26. In addition, international LPG prices are also likely to soften, as the Saudi Contract Price, the global benchmark for LPG, has declined in March and May 2025. This fall, driven by lower crude oil prices, may further reduce under-recoveries by around 20 per cent in FY26, the report added. (ANI)
Zawya
29-04-2025
- Business
- Zawya
UAE'S ADNOC to supply US LPG to India following China-US tariffs, sources say
Abu Dhabi National Oil Company (ADNOC) will start replacing some of the liquefied petroleum gas it supplies to India with cheaper U.S. cargoes from June, industry sources said, as U.S.-China tariffs rejig global trade flows. The move will enable ADNOC to ship more of its own LPG to China, where buyers are paying higher premiums to replace U.S. supply after Beijing imposed steep tariffs on U.S. goods, and reduce LPG costs for India, the world's No. 2 importer. India sources more than 80% of its LPG imports from the Middle East, including Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait, under annual contracts. Earlier this month, Indian refiners made a rare request to Middle East suppliers to swap some of their term supply with U.S. LPG. Indian refiners asked for U.S. LPG to be delivered at discounts to the Middle Eastern benchmark Saudi Contract Price (CP), sources said. ADNOC, through its trading units, has agreed to supply some U.S. LPG cargoes to India refiners under the annual contracts from June-July, said sources. The U.S.-China war has widened the price gap between the Middle Eastern and U.S. LPG, they said. However, one of the sources said: "It is difficult to replace the entire volumes with U.S. LPG." June Goh, an analyst at Sparta Commodities, said: "Unlike China, India's consumption of LPG is mainly for domestic use and requires a higher percentage of butane in the blend." "Thus India can benefit from the diversion of U.S. LPG cargoes but not the propane cargoes," she added. Indian refiners - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp - and ADNOC did not respond to Reuters' requests for comment. India imported about 60% of its overall LPG consumption at 29.66 million metric tons in 2023/24, according to government data.
Business Recorder
29-04-2025
- Business
- Business Recorder
UAE'S ADNOC to supply US LPG to India following China-US tariffs
NEW DELHI/SINGAPORE: Abu Dhabi National Oil Company (ADNOC) will start replacing some of the liquefied petroleum gas it supplies to India with cheaper U.S. cargoes from June, industry sources said, as U.S.-China tariffs rejig global trade flows. The move will enable ADNOC to ship more of its own LPG to China, where buyers are paying higher premiums to replace U.S. supply after Beijing imposed steep tariffs on U.S. goods, and reduce LPG costs for India, the world's No. 2 importer. India sources more than 80% of its LPG imports from the Middle East, including Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait, under annual contracts. Earlier this month, Indian refiners made a rare request to Middle East suppliers to swap some of their term supply with U.S. LPG. Indian refiners asked for U.S. LPG to be delivered at discounts to the Middle Eastern benchmark Saudi Contract Price (CP), sources said. ADNOC, through its trading units, has agreed to supply some U.S. LPG cargoes to India refiners under the annual contracts from June-July, said sources. China's ENN, Zhenhua Oil sign LNG deals with ADNOC The U.S.-China war has widened the price gap between the Middle Eastern and U.S. LPG, they said. However, one of the sources said: 'It is difficult to replace the entire volumes with U.S. LPG.' June Goh, an analyst at Sparta Commodities, said: 'Unlike China, India's consumption of LPG is mainly for domestic use and requires a higher percentage of butane in the blend.' 'Thus India can benefit from the diversion of U.S. LPG cargoes but not the propane cargoes,' she added. Indian refiners - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp – and ADNOC did not respond to Reuters' requests for comment. India imported about 60% of its overall LPG consumption at 29.66 million metric tons in 2023/24, according to government data.
Reuters
29-04-2025
- Business
- Reuters
UAE'S ADNOC to supply US LPG to India following China-US tariffs, sources say
NEW DELHI/SINGAPORE, April 29 (Reuters) - Abu Dhabi National Oil Company (ADNOC) will start replacing some of the liquefied petroleum gas it supplies to India with cheaper U.S. cargoes from June, industry sources said, as U.S.-China tariffs rejig global trade flows. The move will enable ADNOC to ship more of its own LPG to China, where buyers are paying higher premiums to replace U.S. supply after Beijing imposed steep tariffs on U.S. goods, and reduce LPG costs for India, the world's No. 2 importer. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. India sources more than 80% of its LPG imports from the Middle East, including Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait, under annual contracts. Earlier this month, Indian refiners made a rare request to Middle East suppliers to swap some of their term supply with U.S. LPG. Indian refiners asked for U.S. LPG to be delivered at discounts to the Middle Eastern benchmark Saudi Contract Price (CP), sources said. ADNOC, through its trading units, has agreed to supply some U.S. LPG cargoes to India refiners under the annual contracts from June-July, said sources. The U.S.-China war has widened the price gap between the Middle Eastern and U.S. LPG, they said. However, one of the sources said: "It is difficult to replace the entire volumes with U.S. LPG." June Goh, an analyst at Sparta Commodities, said: "Unlike China, India's consumption of LPG is mainly for domestic use and requires a higher percentage of butane in the blend." "Thus India can benefit from the diversion of U.S. LPG cargoes but not the propane cargoes," she added. Indian refiners - Indian Oil Corp ( opens new tab, Bharat Petroleum Corp ( opens new tab and Hindustan Petroleum Corp ( opens new tab - and ADNOC did not respond to Reuters' requests for comment. India imported about 60% of its overall LPG consumption at 29.66 million metric tons in 2023/24, according to government data.
