The Oxygen crisis in India: Reasons


Just so you know :

Sharing below a post from Hanuman Mal Bengani the ex CEO of Linde India.

Linde is one of the largest oxygen producers in India

“Having spent my life time of 45 years in oxygen industry and involved with setting up 50% of production capacities in india ( as business head of Linde) I can share few things which will probably clear some of your thoughts. First few facts

1) Industrial and medical oxygen are same product produced in same plant, stored in same tanks and filled in same cylinders. For medical oxygen the gas company just have to analyse each batch and certify. No other difference. In fact for industrial we need 99.5% pure oxygen where as for medical as per pharmocopea all over world is 93+-3%.
2) There is absolutely no shortage of oxygen product in india. You will be surprised to know that less than 1% of oxygen production capacity is used for medical purposes. Even in corona times it may go up to three times or even 5%. But that’s it.
2) I would estimate total oxygen production capacity in india to be around 100,000 tons per day ( or may be more) and around 80% of oxygen production capacities are with steel companies where oxygen gas is produced and used in iron making as well as steel making. Yes, Relinace Jamnagar has 22000 tons per day capacity for petcoke gassification.
3) Most of captive plant are in East india, some in west ( Mumbai and Gujarat) and some in Karnataka. These plants typically produce 5-10% of product as liquid which is stored in large tanks. This liquid is used by them as back up when plant is down and also to meet peak demands.
4) There are several stand alone liquid oxygen plants owned by gas companies like Linde and Innox where they produce liquid oxygen and sell to various customers through tankers and tanks. 5) Several refillers around country buy liquid from gas companies and fill gas cylinders after vaporising liquid
6) Oxygen is generally delivered to end user by three means. Directly through pipe line from plant to end user which is say 80% of product. 15% or so is delivered in liquid form through tanks and tankers and less than 5% through cylinders

So why are we facing crisis today ? I think combination of followings

1) Shortage of distribution assets ie road tankers, storage tanks and cylinders. Mind you these are expensive. Each road tanker costs 45 lakhs on road and a cylinder costs around 10,000 in which you sell oxygen just worth Rs 300. These assets have been built by gas companies based on normal times. There is only that much one can do with these assets
2) Logistics management. Most of Plants are located in select geographies. So distribution assets travel fair distance ( 200-1000 kms) to deliver to customer. Now even with good roads a tanker takes around 7-10 days to make a round trip and a cylinder also takes that much turn around.
3) Desire of gas companies to focus on what maximises their profits
Last but not least this wave came so quick it took our government administration with pants down. Had they thought of this impending danger and prepared, a major crisis could have been avoided. But that’s easy said than done knowing our democratic set up. Now Govt are taking steps. In hindsight I think Govt could have planned followings
1) Strict advisory to gas companies to use all distribution assets for medical purpose only from day one. They could provide compensation to gas companies for this just like MSP for food grains.
2) Advise all captive plants owners not to use a drop of liquid oxygen from plant / tank for their process use until they are full.
3) Using rails to transport through green door track
4) All hospitals could have installed PSA captive plants. PMO had announced 200 crores for all district hospitals and they could have around 500 plants. In usual public sector tendering process not even 15% of that has been used
5) CEO of large hospitals are also equally responsible. When they charge such huge money from public, they should have better prepared them selves. For what they get fat salaries and bonuses. Once this crisis is over I think some heads of CEO of large hospitals must roll.

No more for now. Any one wishes to know more may contact me on one to one basis.

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