India has for the first time ever signed a contract to import LPG from Iran as it looks at additional sources of cooking fuel to meet rising domestic demand, The Economic Times reported.
State-owned oil firms will import one very large gas carrier (VLGC), or 44,000 tonnes, per month for an initial six-month period, industry sources said.
India imports almost a million tonnes of LPG every month to meet rising demand that has been further fuelled by the government drive to give free gas connections to poor women.
LPG consumption in 2016-17 rose 9.8 per cent to 21.55 million tonnes. Of this, 11 million tonnes came from imports.
India mainly imports LPG via term contracts from major Middle Eastern producers Saudi Aramco, Qatar's Tasweeq, Abu Dhabi National Oil Co and Kuwait Petroleum Corp.
Sources said LPG imports will rise over the next three years to 16-17 million tonnes as the government pushes for making available cooking gas cylinders to the poor and wean them off polluting fuels.
The country is looking to import LPG from Bangladesh.
India had imported 8.8 million tonnes of LPG in 2015-16.
Imports last year made India the world's second-largest importer of liquefied petroleum gas (LPG), behind China. It overtook Japan, which imported 10.6 million tonnes.
Last May, the government launched a programme to provide free cooking gas connection to poor women with a view to cut on use of firewood and polluting fuels like dried cow dung.
LPG demand is projected to grow by 9.7 per cent to 23.7 million tonnes in the current fiscal and is likely to touch 35 million tonnes by 2031-32.
A record 3.45 crore LPG connections were given during the fiscal ended March 31, 2017, including 2.2 crore free connections to poor women. This has taken the number of LPG consumers to 20.08 crore.
As many as 6 crore connections have been given in last three years, taking LPG to 72.84 per cent of the population.
The government is targeting giving out 3 crore connections including 1.5-2 crore under the free LPG connection scheme during the 2017-18 fiscal and another 4 crore in the following year. This would help take LPG coverage to 95.49 per cent of the population.