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Preventing a Repeat of the COVID-19 Second-Wave Oxygen Crisis in India

Author: Amit Thadhani
Publication: Orfonline.org
Date: June 25, 2021
URL:        https://www.orfonline.org/research/preventing-a-repeat-of-the-covid-19-second-wave-oxygen-crisis-in-india/


Medical oxygen is the single most important intervention for moderate and severe cases of COVID-19. Without it, patients can suffocate and die. In India, in the past one and a half years of the pandemic, both hospitals that treat COVID-19, and those that do not, suffered a shortage of medical oxygen. The problem was noted during the peak of the first wave in September 2020, and recurred on a much larger scale during the peak of the second wave, in April and May 2021.  Some trackers have estimated that as many as 512 lives were lost across the country due to oxygen shortage or denial.[1] The reason is not a lack of medical oxygen, per se, but the inadequacy of the distribution network of tankers to transport liquid oxygen from the point of manufacture, to the hospitals.

Indeed, the distribution of medical oxygen is a complex endeavour. Large hospitals are usually supplied directly by manufacturers that use tankers to transport the oxygen. Meanwhile, medium and small hospitals, as well as nursing homes, rely primarily on intermediaries: the manufacturers supply liquid oxygen to filling stations, again via tankers; gas agencies, who own cylinders, then get them filled in filling stations and thereafter supply them to the nursing homes either via “jumbo cylinders” (gaseous oxygen) or “dura cylinders” (containing liquid oxygen that expands 860 times to gaseous form).

This entire supply chain was severely disrupted at multiple levels due to the steep and sudden rise in demand across the country—from 3,842 MT per day on 12 April 2021 to 8,400 MT per day by 25 April, and further up to 11,000 MT per day by the beginning of May—before gradually reducing as the number of fresh cases declined.[2] At the time of writing this report, the demand has gone down to normal levels and supplies are adequate once again.

Responding to the Surge

In April 2021, when the demand for medical oxygen suddenly increased, more tankers needed to be pressed into service. However, India only had around 1,200 cryogenic oxygen tankers across the country—the number is insufficient for servicing the requirements. To solve the problem, some state governments such as that of Uttar Pradesh repurposed tankers used for other liquid gases to service the transportation of medical oxygen; they utilised technology, too, and tagged tankers to get real-time data on their location.[3] Several large corporations including Reliance, Adani Group, and Tata Companies, stepped in to divert industrial oxygen from their plants to hospitals across the country.[a] The Central government airlifted tankers from other countries[4],[5] and has been running Oxygen Express trains to affected areas for the rapid transport of liquid oxygen from large industrial plants.[6],[7] The Delhi state government announced in the last week of April that they would import cryogenic tankers from Bangkok, as well as oxygen plants from France.[8] The Central government also flew in ready-to-use plants for installation at several government hospitals. As per the central government, the number of oxygen tankers stands currently in excess of 2,000 amounting to about 30,000 MT of liquid oxygen. This, too, would probably be inadequate in the event of a large third wave if daily consumption again rises to 11,000 MT per day or more, as the average turnaround time for a tanker is five to seven days.

In what has been widely described as reciprocity for India’s own vaccine outreach during the first wave in 2020, different countries sent donations of oxygen concentrators, oxygen plants, and tankers to India beginning in the last week of April when the country’s massive battle with the steep surges in cases was being highlighted in the international media.[9] The question remains: Why was India caught unprepared for the sudden rise in demand for medical oxygen?

How the Best Laid Plans Came to Naught

In the beginning of 2020, the Ministry of Commerce’s Department of Promotion of Industry and Industrial Trade formed an ‘oxygen monitoring committee’ and held several rounds of discussions with oxygen manufacturers’ associations on the augmentation of capacity based on potential requirements.[10] State governments were apprised of the need to set up oxygen plants at the bigger hospitals in their jurisdictions, and funds were allocated for 162 oxygen plants from PM CARES Fund for this purpose in January 2021.[11] By that time, however, it appeared that the first wave of the pandemic was ebbing, and the sense of urgency was lost. Most states did not proceed to setting up the oxygen plants—and they would land into extreme difficulties during the second wave.

Only a few states, such as Assam and Uttar Pradesh, set up oxygen plants at key hospitals.[12],[13] Kerala, too, augmented its capacity and claimed to be oxygen-surplus; soon, however, they requested for additional oxygen allocation as the situation in the state started to deteriorate.[14],[15] The state of Odisha, which was recording relatively lower infection rates in the beginning of the second wave, stepped in to supply 345 tankers of oxygen to severely affected states as it has several large industrial plants producing massive quantities of oxygen.[16] The state was able to comfortably manage its own requirements.

During the first wave, some parts of the country such as Mumbai and other cities of Maharashtra, faced shortages in oxygen but quickly overcame the gaps by diverting oxygen tankers from states that had more. The second wave brought a severe challenge, however, as several large states across the country suffered massive increases in cases in a very short time. This exposed the sheer inadequacy of the distribution network for medical oxygen. Manufacturers were unable to deliver even to the large hospitals. Smaller hospitals ran out of supply, sometimes leading to catastrophic consequences.[17] To manage the situation, these smaller hospitals lent each other a few cylinders that helped for a few hours, until their own supplies arrived. Suppliers’ vehicles would often spend several hours waiting in queue for refilling of oxygen cylinders, only to be turned back as stocks were quickly exhausted.

Compounding Issues

The Black Market

The cost of medical oxygen rose rapidly to as much as ten times that before the pandemic. Cylinders quickly disappeared from circulation, as individuals and black-marketeers alike began to hoard supplies.[18] Black-marketing, though rampant across most of North, West and Central India, occurred on a much lesser scale in states such as Kerala, Tamil Nadu, and Karnataka, as far fewer patients may have been on home oxygen due to better public health infrastructure. Moreover, the peak of the second wave in some Southern states such as Karnataka and Tamil Nadu (in the second week of May 2021) came about two weeks later than that in states such as Maharashtra and Delhi (in the third week of April 2021)—by which time a significant part of the supply problem had been sorted out.

Small portable cylinders such as those used by mountaineers, were selling at over INR 25,000/- each in Delhi; the actual cost would not be more than INR 1,000. In some states such as Maharashtra, the government stepped in to put a cap on the price of oxygen per cylinder. This proved completely ineffective, though, as dealers billed separately for transportation and logistics, leaving the net cost to hospitals virtually unchanged. The black market for oxygen cylinders continued to flourish across several states as hospital beds became scarce and home care was the only option for thousands of patients.[19] Oxygen concentrators quickly flew off the shelves and their selling price shot up from INR 35,000 to 40,0000 pre-COVID-19, to over INR 100,000 in April and May 2021.

Oxygen Rationing

As the situation turned dire, the central and state governments turned to oxygen rationing. The concept is not unique to India. Hospitals in the United States (US) and the United Kingdom (UK) resorted to implicit or explicit rationing of medical services including oxygen during the peak of the pandemic in their respective countries.[20] However, the manner in which rationing is done is different in each country. In India, the Central government collected data on oxygen beds and ICU beds from all COVID-19 hospitals in each state and allocated a certain quantity of oxygen to the state, according to the amount that was deemed necessary for the treatment of every patient. For example, 5 lit/min was allocated for an oxygen bed, and 20-24 lit/min for an ICU bed.

In turn, each state allocated a quota to each district, and each district to the hospitals under their jurisdiction. Moreover, the use of High-Flow Nasal Cannula (HFNC) was strongly discouraged by several state governments such as Maharashtra and Karnataka  as unnecessary wastage of oxygen.[21],[22] HFNC is a commonly used treatment modality for COVID-19 patients that pushes in a high flow of oxygen at up to 100 lit/min to severely ill patients. It is known to reduce the need for ventilatory support by over 50 percent. Several other measures have also been introduced. Hospitals have been directed to appoint a nurse whose sole responsibility will be to monitor and control oxygen wastage, from leaking oxygen lines to patients not turning off their oxygen on visits to the washroom.[23],[24] Another person must be appointed to brief the collector’s office on daily requirements and supplies.

In Maharashtra, the state government has set up ‘control rooms’ that ensure that the supply chain is maintained, even though the cost of oxygen for the hospitals is extremely high. Municipal officials, and occasionally top officials such as the collector of the district, take rounds in COVID-19 hospitals and point out ways in which oxygen wastage can be curbed. At some places, this has gone to extremes, with doctors making allegations about officials turning off some patients’ oxygen supply, fiddling with ventilator settings, and reprimanding treating teams for wasting oxygen if the patient’s oxygen saturation does not fall without it.[25]

Though on the face of it, these measures might be able to ensure equitable distribution of a highly valuable resource, it will only be counter-productive because of the following essential facts:

  1. Patients’ requirements are not static. They may change from minute to minute, and from 2 lit/min to           15 lit/min within a matter of hours. It takes much longer for requirements to fall than it takes for      them to rise, and therefore, even attempting to average the requirements may not work well.


  1. ICU requirements of oxygen are much higher than 20 lit/min. As the fundamental treatment         modality in COVID-19 is non-invasive ventilation (NIV) or BiPap,[b] the average consumption is             30-40 lit/min.
  1. Vendors can under-fill the oxygen cylinders, sometimes intentionally, or others due to lapses in the     filling process. Therefore, there is no guarantee that the allotted quota contains the claimed amount      of oxygen.


  1. If supply of oxygen is going to be fixed at a certain level with no possibility for compensation if a         patient with higher requirements were to need treatment, it is almost inevitable that hospitals would try to accommodate only those patients it can manage within that allotted quota, and avoid those       who have higher requirements. This translates to patients with less severe cases getting adequate treatment in hospital, and the more severe ones are left unable to find a hospital bed.

While “oxygen rationing”, therefore, ensured that hospitals get at least some regular supply of oxygen, it indirectly discouraged these facilities from admitting more critically ill patients with the highest requirements for an ICU bed, for fear of being unable to treat other patients properly due to limited supplies of oxygen. This can translate to higher mortality. Oxygen rationing, though unavoidable in many respects under the present situation, is far from an ideal solution. If the requirements are to be calculated, they should be on the basis of maximum and not minimum consumption. For example, instead of telling hospitals not to use HFNC, the requirement needs to be considered during calculations for procurement.

At the state level, the oxygen crisis led to allegations of political favouritism. The issue reached the chambers of the Supreme Court, where the state of Delhi and the Centre made allegations and counter-allegations on each other regarding oxygen supplies to Delhi.[26] While the Delhi government claimed that supplies were deliberately held up by the Centre, it refused an oxygen audit to ascertain its actual requirements. The central government, for its part, insisted that the oxygen supplies to Delhi were adequate, but still maintained that additional allocations could not be done without compromising on supplies to other states. Some states seized oxygen tankers meant for other states[27] and diverted them to their own hospitals, leading to conflicts between states. Oxygen tankers have now been given security and escorts to ensure that they reach their destinations without disruption.[28]

At the time of writing this report, the second wave has abated with daily numbers of fresh cases across India dropping to around 50,000, from the peak of over 400,000 per day recorded on 4 May 2021.[29] The conflicts regarding oxygen supply, too, appear to have been resolved, at least for now.

Towards Long-term Solutions

The Central government in June 2021 launched “Project O2 For India”[30] under the direct command of the office of Principal Scientific Advisor. A National Consortium of Oxygen consisting of corporations, Indian Institutes of Technology (IITs), and various non-profit organisations is helping the government in building up the supply chain of critical materials and parts of oxygen plants. Funding for plants is being arranged through PM CARES,[c] as well as corporate sponsorships via CSR funding.

The execution of permanent solutions such as setting up oxygen plants and procuring adequate numbers of cryogenic tankers also need to be completed in an urgent manner. There are today reasonably good solutions available: for example, Pressure Swing Adsorption (PSA) plants can be set up within a matter of a few days in small areas of up to 200 sq ft, as compared to the traditional cryogenic plants that take six months or more and need a large area of a few acres, at least. Most oxygen plants that are being installed in hospitals are PSA plants. The problem for the vast majority of nursing homes and small and medium-sized hospitals, is the capital investment needed to install PSA plants. Some states such as Madhya Pradesh and Maharashtra are offering incentives to private companies for the setting up of cryogenic oxygen plants and manufacturing cryogenic containers.[31],[32]

Other states are prioritising building oxygen plants within government hospitals and over 1,200 oxygen plants have been sanctioned at government hospitals with PM CARES funds.[33] Of these, 551 plants were approved for district hospitals.[34] Tenders were called for 162 plants in October 2020. The process ran into problems as the companies that won the tender were unable to deliver the plants.[35] However, several corporations such as Coal India, Maruti Suzuki, and Tata Group have stepped in, offering to build plants at various hospitals. Several plants have been commissioned in UP, Haryana, Kerala, Assam, Nagaland, Gujarat, Maharashtra and other states either through state and central government funding, or by corporate support. As there are 734 district hospitals in the country, it can be reasonably assumed that most of them would have a functional oxygen plant in place within the next few months, provided the local authorities expedite the installations. According to the government’s data presented before the Supreme Court, 33 plants funded through PM CARES are already functional and 80 are in various stages of construction.[36]

Corporate-sponsored PSA plants are being commissioned almost on a daily basis across the country. Table 1 gives a representative but not exhaustive list of some of the plants being executed across the country:[37],[38],[39],[40],[41],[42],[43],[44],[45],[46]




            Number of plants

Maruti Suzuki 

J&K, Haryana & others








Tata Sons and DRDO   



Oil PSUs         



DCM Shriram  



Tech Mahindra



Northern Coalfields      

Madhya Pradesh          


Western Coalfields       



Powergrid Corporation 




Maharashtra Health Minister Rajesh Tope has declared that it would be made mandatory for all private hospitals to have in-house oxygen plants.[47] The Haryana Government has also asked all hospitals with over-50 bed capacity to make their own arrangements for oxygen.[48] Some oxygen plants that were lying in disuse have been recommissioned and restarted. Police raids have been conducted on black-marketeers and huge numbers of cylinders and oxygen concentrators have been recovered.[49],[50]

Recommendations and Conclusion

Private hospitals are also being mandated to install oxygen plants. However, most small nursing homes and medium-sized hospitals do not have the required resources. Hospitals without intensive care setups can manage with oxygen concentrators and cylinders, and plants should not be insisted upon. For medium and larger hospitals, some financial support is needed to soften the cost implications of oxygen plants in the short term. The Central government has made provisions for soft loans to hospitals[51] and nursing homes for setting up oxygen plants, for a maximum of INR 2 crores and interest rate for the loan has been capped at 7.5 percent per annum.

Several NGOs and religious organisations have also offered to set up oxygen plants at government facilities.[52],[53] However, the drive to install oxygen plants is facing resistance from administrators of many government hospitals, as they claim lack of space and permissions as obstacles in setting up the plants.[54] An “iron fist in velvet glove” approach will be needed to overcome such bureaucratic hurdles.

Some additional obstacles are expected thereafter. Many government hospitals indeed had their own oxygen plants but they had fallen into disuse. Repairs were not done and instead, large liquid oxygen tanks were installed that made the hospital dependent on transport network and suppliers. A similar situation must be pre-empted and strategies formulated to prevent the newly built plants from falling into disuse. This becomes especially important as many of these plants are being donated by well-meaning organisations and their maintenance will eventually have to be managed by the recipients. Hospitals will save significant financial resources on oxygen due to these plants and some part of these resources would need to be diverted towards maintenance. Regular functioning audits of the plants would also need to be conducted and capacity augmentation done as needed.


-Dr Amit Thadhani is a practising general surgeon and Director, Niramaya Hospital, Kharghar Navi, Mumbai, a 75-bed hospital that has been a Dedicated COVID-19 Hospital in the past year.    

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