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COVID-19: All you want to know about oxygen manufacturing in India

The government is concentrating hard on the three types of oxygen sources available - air separation units used for commercial purposes, pressure swing adsorption meant for producing on a medium scale and the oxygen concentrator, which is used to manufacture the nutrient at homes and small rooms

April 27, 2021 / 04:05 PM IST

The country is reeling under an unprecedented crisis with several hospitals struggling to get a continuous supply of oxygen.

The manufacturing and supply of this life-saving gas, which was always a surplus commodity in India, has suddenly become scarce and a top priority for the government.

Moneycontrol examines the various sources of this critical gas, its principal producers, and the expenses involved.

Types of oxygen sources

Medical oxygen is a high purity nutrient, while industrial oxygen is used in factories for combustion, oxidation, cutting and chemical reactions.


The purity levels of industrial oxygen are inappropriate for human use. However, post the outbreak of COVID-19; industrial oxygen has also been diverted for medical purposes in India after clearing the impurities.

There are mainly three types of oxygen sources in India at present. These are the air separation units (ASU) that are used for commercial purposes, pressure swing adsorption (PSAs) for producing on a medium scale and oxygen concentrator, which is used to manufacture oxygen at homes and small rooms.

The major oxygen manufacturers in the country include Inox Air Products, Linde India, Atul Oxygen Company, Aims Industries, P K Carbonics, Vinayak Air Products, Scoop Industries, Hiltone, Raj Gas Industries, Kashmir Gases, Universal Air Products, Popular Carbonic, Raigad Carbides, Taiyo Nippon Sanso India, Phoenix Gases, Essem Gases, Rukmani Metals and Gaseous, Kolhapur Oxygen & Acetylene, Goyal MG Gases and Assam Air Products.

After the national shortage, the government decided to come up with 551 dedicated Pressure Swing Adsorption (PSA) medical oxygen generation plants to be set up along with public health facilities across the country, sourced to the PM CARES fund.

After allowing the use of industrial oxygen for medical purposes, India’s daily production capacity was to the tune of 7,100 metric tonnes per day (MTPD).

Early this week, the government allocated 6,822 MTPD to 20 worst-affected states, compared to the demand of 6,785 MTPD.

Cost of setting up an oxygen plant

ASUs are used to produce oxygen on a large scale. India’s largest medical oxygen manufacturer, Inox Air Products, told Moneycontrol that the company is planning to come up with eight medical oxygen manufacturing units producing around 200 MTPD at a total investment of around Rs 2,000 crore.

Going by this thumb rule, the average cost of setting up a 200 MTPD plant is expected to be to the tune of Rs 250 crore. Inox had invested around Rs 200-250 crore for 150 MTPD plants in Modi Nagar.

On the other hand, PSAs are small units used to produce oxygen in small hospitals. “A PSA plant is used in small hospitals, primarily in district hospitals where they don’t have an oxygen unit in close proximity. These are essentially tiny in capacity, like 20 to 200 cylinders a day. However, it is commonly used in 50-100 bedded hospitals,” said Saket Tiku, president of the All India Industrial Gases Manufacturers Association (AIIGMA).

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The government is planning to come up with 551 PSAs that may see an investment to the tune of around Rs 683 crore. Last year, the government had allocated Rs 201 crore to set up around 162 PSAs.

“There are various types of ASUs. They are big and can go up to Rs 60-200 crore for construction, depending on the size of the plant and other equipment required. PSA plants are also required. They are good but when we have to supply to big hospitals where the consumption is huge, PSAs are not much help,” Tiku added.

After the Second Wave, there is a sudden rise in demand for oxygen concentrators too. An oxygen concentrator is a medical device that takes in this air, filters it through a sieve, releases the nitrogen back into the air, and works on the remaining oxygen. Thus the device concentrates oxygen from surrounding air. Normal airspace has 78 percent nitrogen, 21 percent oxygen and 1 percent other gases.

While a normal oxygen cylinder costs around Rs 8,000 to Rs 9,000, the price of oxygen concentrators ranges from Rs 40,000 to Rs 90,000.

However, the advantage it offers is that it will be a one-time investment for families, offices and hospitals.

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