A man unloads an empty LPG cylinder at a warehouse amid supply disruptions following the U.S.-Israeli conflict with Iran, in Mumbai, India on March 11.Francis Mascarenhas/Reuters
The war in the Middle East has triggered an energy crisis in South Asia, disrupting daily life for millions of people as fuel prices surge and supplies tighten.
Long queues have been seen outside cooking gas distribution centres in India and Bangladesh as fears of shortages of liquefied petroleum gas, or LPG, have triggered scuffles, protests and panic buying.
India has one of the world’s largest cooking gas programs, where LPG cylinders are distributed at subsidized rates. In Pakistan and Bangladesh, long lines were seen at gas stations.
Governments have asked office workers to work from home, shut universities and started rationing fuel as restaurants close across the region.
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The disruption to energy supplies stems from blocked shipping through the Strait of Hormuz, the narrow passage linking the Persian Gulf to the Gulf of Oman and the Indian Ocean. About a fifth of the world’s oil and liquefied natural gas pass through the strait, where Iran’s military presence along the northern shore allows it to monitor and potentially threaten any ship passing through.
Iran’s new Supreme Leader Mojtaba Khamenei said on Thursday that Iran would keep the Strait shut until the U.S. closes all bases in the region. At least 16 vessels have been attacked in the Gulf since the start of the war, according to Reuters. There have been about eight seafarer casualties on shipping vessels with several more unaccounted for, according to the International Maritime Organization.
“Iranian closure of the Strait of Hormuz is a global energy security nightmare. South Asian countries share the fact that they import large percentages of their total energy consumption. They are extremely exposed to energy shocks coming from the Middle East,” Christopher Clary, a non-resident fellow with the Stimson Center’s South Asia program, told The Globe and Mail. “When shipping through Hormuz is threatened, South Asia feels it almost immediately.”
An LPG gas tanker at anchor as traffic is down in the Strait of Hormuz, in Shinas, Oman, on March 11.Benoit Tessier/Reuters
Traffic through the strait has slowed since the eruption of the Iran war, pushing oil prices from about US$78 a barrel to more than US$100 in less than two weeks.
Gulf states supply almost 90 per cent of India’s LPG, and the country imports more than 80 per cent of its crude oil. Roughly half of that, about 2.5 to 2.7 million barrels a day, typically travels through the Strait of Hormuz from suppliers such as Iraq, Saudi Arabia and the United Arab Emirates.
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The country still holds roughly 100 million barrels in refinery and commercial reserves, providing some buffer. India could also increase purchases of crude from Russia now that the U.S. has temporarily suspended sanctions.
But analysts say the bigger vulnerability lies in LPG and liquefied natural gas, both heavily sourced from Gulf producers.
“I have been standing in a queue for the past two hours just to get an LPG cylinder,” Tauseef Khan, 32, standing outside a distribution centre in Kannauj, a town in northern India, told The Globe and Mail. “We are in panic and fear that LPG supply might run out. Even the online booking system is not working, which is making everyone more anxious.”
Manoj Yadav, an auto-rickshaw driver in Mumbai, said he had to buy a cylinder for 1,600 rupees on the black market because he could not find one through regular suppliers, where a cylinder would cost about 912 rupees. “Everyone is trying to refill their cylinders before the supply stops. If we don’t get a cylinder, many of us won’t be able to eat because we can’t afford to buy food from outside,” Mr. Yadav said.
People stand in line with their empty LPG cylinders outside a gas agency in Ahmedabad, India on March 12.Amit Dave/Reuters
A woman in the Shravasti area of Uttar Pradesh state fainted and fell after standing in a long queue for many hours. A viral video of another woman showed her crying for help because she could not get a cylinder for four days owing to an issue with her identification card.
“I’m an ulcer patient and I can’t eat food from outside. My blood pressure is already dropping. If I can just get the cylinder, I’ll go home and cook for myself,” the elderly woman, Savitri Devi, told reporters outside a distribution centre in Lucknow, the capital of Uttar Pradesh.
Restaurants and hotels have also been affected by the shortage of commercial cooking gas, forcing them to trim menus, delay opening hours and, in some cases, completely shut their kitchens.
In several cities, restaurant owners built traditional clay ovens and brick stoves, burning firewood to keep their kitchens running.
“We regret that we are unable to prepare and serve the main course items,” said Sandeep Sharma, who heads the Delhi High Court lawyers’ canteen. In a letter captioned “unavailability of LPG gas cylinder” to the court’s secretary, Mr. Sharma said, “At the moment, we do not have any information regarding when the LPG supply will be restored.”
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In Bengaluru, India’s technology hub, a multicuisine restaurant shortened its menu and put a notice that “only coffee and tea is available today.”
The Bangalore Hotels Association has warned that cooking gas deliveries have stopped, leaving eateries unable to operate normally. “The gas supply has been stopped since Monday. The common people, including senior citizens and students who depend on delivered meals from tiffin services, hostels and small kitchens will struggle to get their daily meals,” Veerendra Kamath, the association’s general secretary, told The Globe and Mail.
“Oil companies had said that there would be no disruption in gas supply for 70 days. However, the sudden stoppage of supply is a big blow to the hotel industry,” Mr. Kamath said, urging the government to take immediate action to resume supplies.
Workers prepare food using firewood instead of cooking gas outside a restaurant in Bengaluru, India on March 12.Priyanshu Singh/Reuters
Raghunath Medge, a member of Mumbai’s 5,000-strong dabbawala (tiffin carrier) community, which delivers hot meals to workers, said, “The crisis is real, and we fear a return to the pandemic days.”
“If kitchens cannot cook, thousands of people who depend on our tiffin deliveries will struggle to get their daily meals,” said Mr. Medge.
At Mumbai’s iconic dhobi ghat, the world’s largest open-air laundromat, washermen typically process more than a hundred thousand garments daily. Now, they scramble for cylinders to run the drying machines.
“The suppliers tell us there are no cylinders available, but some agents are selling them in the black market,” said a washerman, Kiran Kanojia. “Because of the shortage, we cannot run the dryers regularly, and deliveries of clothes are getting delayed by several days.”
The government has raised the cost of commercial LPG cylinders by more than 100 rupees, putting even more pressure on restaurants, caterers and small businesses.
Sujata Sharma, the Joint Secretary of the Ministry of Petroleum and Natural Gas, said that India’s crude oil supplies remain secure, and there is no need for panic buying of LPG. “The normal delivery cycle for domestic households remains two and a half days,” Ms. Sharma said.
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Countries such as Pakistan and Bangladesh, which have less stable political situations and already faced economic precariousness, may be especially exposed.
“The biggest risk is public dissatisfaction will threaten the governments in the most affected countries, making them vulnerable to social mobilization campaigns,” Mr. Clary of the Stimson Center said.
“There may be longer-term risks associated with likely increases in fertilizer costs, since those closely track global fossil fuel prices, which could decrease yields for farmers months after the crisis concludes,” he said.
In Bangladesh, authorities shut universities and imposed strict daily limits on fuel purchases in an effort to prevent hoarding.
Under the restrictions, motorcyclists can buy only two litres of fuel per day, while private cars are limited to 10 litres.
In Pakistan, which already struggles with recurring energy shortages, authorities have ordered government departments to cut energy use while recommending remote working and online classes.
The government has increased petrol and diesel prices by about 55 Pakistani rupees, pushing petrol above 320 rupees per litre. It has also warned of penalties for hoarding petroleum products.
Islamabad has also approached Saudi Arabia about seeking alternative oil supply routes through the Red Sea should shipping through the Strait of Hormuz remain blocked.
With reports from Reuters