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Industrial gas demand faces headwinds-I: LPG and propane emerge as competitors
Oct 09: Many competitive fuels are now fighting to take on gas as a fuel and feedstock in the Indian market.
8Besides liquid fuels such as petroleum coke, it is learned that ethane and LPG are now being increasingly used by industrial users in preference to gas.
8Nowhere is the new trend more pronounced than in the industrial cluster of Morbi, where 15 new propane-based units are coming up and many more are in various stages of construction. LPG usage too has gone up.
8Interestingly, coal is also a relevant fuel for the furnace owner as its price is cheaper than LNG.
8Then again, what has made matters worse is that due to restrictions  in Australian LNG exports, spot gas prices have increased by 35% to USD8.4/mmBtu over the past four weeks
8A large chunk of industrial demand in India is dependent on spot LNG, as its prices had been hovering lower than long-term crude-lined LNG prices after crude values fell.
8Another factor that has hit gas suppliers is the non-inclusion of gas in GST. This has cut industrial volumes sharply in some industrial clusters where LNG usage was preponderant.
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