Why There is Oxygen Shortage?: An Expert Lays Bare the Fact

(Hanuman Mal Bengani)

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

1) Industrial and medical oxygen are the same product produced in the same plant, stored in the same tanks, and filled in the same cylinders. For medical oxygen, the gas company just has to analyze each batch and certify. No other difference. In fact, for industrial we need 99.5% pure oxygen whereas for medical as per pharmacopeia all over the world is 93+-3%. (no harmful contaminants like carbon monoxide, carbon dioxide, nitrogen oxides sulfur oxides should be there.)

2) There is absolutely no shortage of oxygen products 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.

3) I would estimate total oxygen production capacity in India to be around 100,000 tons per day ( or maybe 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 steelmaking. Yes, Reliance, Jamnagar has 22000 tons per day capacity for pet coke gasification.

4) Most of the captive plants are in East India, some in the west (Mumbai and Gujarat) and some in Karnataka. These plants typically produce 5-10% of the product as the liquid which is stored in large tanks. This liquid is used by them as a backup when the plant is down and also to meet peak demands.

5) There are several standalone liquid oxygen plants owned by gas companies like Linde and Innox where they produce liquid oxygen and sell it to various customers through tankers and tanks.

5) Several refillers around the country buy liquid from gas companies and fill gas cylinders after vaporizing liquid oxygen.
6) Oxygen is generally delivered to the end-user by three means. Directly through the pipeline from the plant to end-user which is, say 80% of the product. 15% or so is delivered in liquid form through tanks and tankers and less than 5% through cylinders
So why are we facing a crisis today?

I think the combination of following

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 the Plants are located in select geographies. So, the distribution assets travel a fair distance (200-1000 kms) to deliver to the 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 maximizes 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 setup. Now Govt is taking steps. In hindsight, I think Govt could have planned the following things.

1) Strict advisory to gas companies to use all distribution assets for medical purposes only from day one. They could provide compensation to gas companies for this just like MSP for food grains.

2) Advise all captive plant owners not to use a drop of liquid oxygen from the 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 Rs. 200 crores for all district hospitals and they could have around 500 plants. In the usual public sector tendering process not even 15% of that has been used.

5) CEOs of large hospitals are also equally responsible. When they charge such huge money from the public, they should have better prepared themselves. What for are they getting fat salaries and bonuses?  Once this crisis is over I think some heads of CEO of large hospitals must roll.

(Hanuman Lal Bengani, former CEO of Linde India)

(This viral post is taken from a mail we received from a social activist from Hyderabad)

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