New Delhi: India’s liquefied natural gas importers are being forced to top up with pricey imports due to the scorching heat and frequent blackouts.
According to merchants familiar with the subject, Torrent Power Ltd. and GAIL India Ltd. purchased LNG for May delivery in the last week, with the fuel slated to be utilised to help power plants enhance generation. As Russia’s war of Ukraine exacerbates a global supply shortage, the utilities paid roughly treble the average spot amount for this time of year.
The acquisitions are rare for India’s cost-conscious power providers, who prefer not to acquire LNG at such high prices. They show how a domestic coal shortfall is prompting the South Asian country to seek alternate fuels at any cost, driving up worldwide demand.
Despite the fact that natural gas accounts for a modest fraction of India’s power mix, a lack of coal and hot weather have resulted in scheduled blackouts, which threaten to disrupt the economy. According to BloombergNEF, gas produced about 4% of the nation’s electricity in 2020, compared to 71 percent for coal.
According to the merchants, GAIL is looking for at least one more shipment for late May, and numerous other Indian companies are inquiring about cargoes in the bilateral market.
To avoid blackouts for the Eid vacation this week, Pakistan purchased the country’s most costly shipment of petroleum ever in response to the heat wave. Cash-strapped Pakistan recently issued a tender for the procurement of two more cargoes for the month of June.
“South Asia, including India and Pakistan, experience their hottest weather in advance of the monsoon at this time of year,” said Jason Nicholls, a meteorologist at AccuWeather Inc. “Until the monsoon rains arrive in June and July, these locations will likely continue to be favoured for heat waves.”
The Inputs are taken from Bloomberg Report
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