Two India-bound liquefied petroleum gas (LPG) carriers have safely transited the Strait of Hormuz carrying about 94k tonnes of cooking gas, Reuters reports, citing Kpler and LSEG data. The vessels are expected to arrive in Mumbai and New Mangalore ports this week.

Fragile transit window: The passage comes as Iran selectively permits vessels from “friendly nations” to transit the Strait of Hormuz, and follows direct engagement between Indian Prime Minister Narendra Modi and Iranian President Masoud Pezeshkian. Four Indian LPG tankers have already crossed so far, while 18 others with 485 seafarers remain in the western Gulf. While this arrangement has allowed critical energy shipments to pass through, it remains fragile as the fate of the strait — which handles about 20% of global oil and liquified natural gas — continues to be shaped by wartime calculations.

The Indian Navy has deployed four to five warships to escort Indian-flagged vessels through Hormuz, focusing on vessels carrying critical energy supplies, Deccan Chronicle reports. Indian warships are operating in and around the Gulf of Oman, with New Delhi opting for independent deployments rather than joining any US-led coalition in the region.

The cost of doing business: While Iran has labeled India a friendly nation, this hasn’t changed the high operational costs for Indian traders. Indian traders are looking at 40-50% higher ins. charges on Gulf-routed cargoes, according to a report (pdf) by global reins. firm Howden Re. War risk premiums for the strait have surged to 5% of vessel value, up from a pre-crisis 0.25%. For a very-large gas carrier, that could imply a multi-mn-USD surcharge per voyage.

Kerosene returns as India’s fallback fuel

India is reintroducing kerosene through its public distribution system in a 60-day emergency measure to offset cooking gas shortages, as per a notification from the Ministry of Petroleum and Natural Gas. The reintroduction includes 21 states that had completely transitioned away from kerosene.

Exposed: India has spent the last decade trying to eliminate kerosene to push households toward the cleaner LPG fuel, but the latest measure lays bare India’s exposure to external energy shocks. Since kerosene is subsidized, if the current 60-day window is extended, it may also stir a new, unplanned strain on the treasury.

Distribution expands: Select petrol pumps have been permitted to sell kerosene, widening access beyond government-operated ration shops in a temporary rollback of India’s clean-fuel transition as supply security takes priority.

Coal prices heat up

Coal India, the country’s largest coal producer, saw e-auction premiums rise to about 35% above notified rates in February, MjunctionServices Managing Director Vinaya Varma told the Press Trust of India in an interview.

IN CONTEXT- This comes on the back of industries opting for coal amid war-driven gas shortages. As supply tightens, industrial clusters are increasingly substituting gas with coal amid high seasonal demand from the power sector.

Room for upside: Despite rising premiums, only 47% of auction volumes have been sold, indicating further scope for price and demand upticks. However, coal stocks at power plants are adequate, covering 18-20 days, which will prevent panic buying for now.

Tags: