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SEP 12 2014

South Gujarat units fear closure with cut in APM gas supply

  • Economic Times, ET Bureau / Hyderabad
  • Created: Fri 12th SEP 2014

The small gas consumers of south Gujarat mainly engaged in glass and ceramic industry, are facing closure as the Petroleum and Natural Gas Regulatory Board (PNGRB) has decided to halve the supply of APM gas to over 30 units beginning September 16.

The units through their association South Gujarat Small Gas Consumers' Association (SGSGCA) have approached the PNGRB and Gas Authority of India Ltd (GAIL) that supplies APM gas, and made representation seeking relief. The association is awaiting response from the union government on the issue within a few days.

There are about 30 small consumers in South Gujarat region which consume 0.6 million standard cubic meters per day (SCMD) gas. These units from the bottom of the priority list defined by the PNGRB for supply of APM gas. The proposed cut in supply of gas to these units is around 58 per cent that is the supply will be cut to 0.25 million SCMD.

The units facing closure threat include Pragati Glass, Piramal Glass, Haldyn Glass, Gujarat Borosil, Schott Glass, Belgium ceramics and others. Through revised guidelines issued by the PNGRB, GAIL has been directed to divert gas supply from non-priority sectors (units consuming less than 50,000 SCMD) to meet requirement of CGD (city gas distribution) entities for CNG (transport) and PNG (domestic).

According to SGSGCA vice president Ashok Jain, GAIL wants to cut supply of gas to half with a very short notice. "Our members have been informed about the PNGRB revised guidelines and proposed cut in gas supply by GAIL on September 10 and they wanted this new cut to be implemented from September 16. This is a very short notice for units which need full fuel supply to keep the furnaces burning round the clock," said Jain who is a director at the Gujarat Borosil Ltd having plant in Bharuch. He added that this was kind of high handedness of the union ministry.

These units employ about 120,000 people directly and another 600,000 indirectly, Jain said, adding that these units contribute large amounts to exchequer and have substantial exports.

"This action of GAIL and PNGRB will ensure that manufacturing, at least in glass and ceramic sector, in south Gujarat be shut down," Jain claimed. He further said that his company is the only producer of solar glass in India and such restriction will curtail Borosil's production and negatively impact the National Solar Mission.

As per SGSGCA the proposed action of GAIL and the directions of PNGRB are ill conceived, arbitrary, unjust and ignore the fact that these small gas consumers have set up their factories in isolated and small rural areas based on availability of gas.

Jain said that they were getting gas at Rs 10 per SCMD as of now and once the supply is cut by 58 per cent they will have to purchase gas from the open spot market which could cost around Rs 40 per SCMD.

SGSGCA has appealed that their industry be treated as priority and requested the union government to take a broad view in the matter and help the small consumers having allocation of less than 50,000 standard cubic meters per day (SCMD) by not applying any cut and maintaining the status quo.


Gujarat Gas Natural Gas Petrol CNG Petroleum and Natural Gas Regulatory Board Petroleum CGD Consumer India Suryalakshmi Cotton Mills AP AIL Solar

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