Fuel Crisis Hits India: How gas supply cuts could impact Country’s supply chain

Fuel Crisis Hits India: India is starting to feel the impact of ongoing gas supply disruptions. These issues are now affecting many sectors—from city gas distribution to manufacturing units. Businesses that depend on gas for daily operations are beginning to face real challenges as supplies become uncertain.

Impact on City Gas Distribution

Gas supplies to commercial units have been cut back, hitting companies like Indraprastha Gas Limited (IGL) and Mahanagar Gas Limited (MGL) hard. With less gas available, many businesses that rely on this fuel are worried about how it will affect their work moving forward.

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Impact of Gas Supply Constraints: Tiles industry faces pressure

Gas plays a big role in tile manufacturing, making up nearly a quarter to a third of the total production cost. Companies such as Kajaria Ceramics and Cera Sanitaryware are feeling the pinch. In Morbi, a key ceramic cluster, many units have already been forced to shut down due to reduced gas supplies.

Impact of Gas Supply Constraints: Rising costs for wood panel makers

Wood panel manufacturers like Century Plyboard and Greenply Industries have seen raw material costs shoot up — some prices have jumped between 13 and 46 per cent. Because of this, it seems like product prices will have to go up soon to keep pace.

Impact of Gas Supply Constraints: Electronics industry faces supply cuts

In the electronics sector, companies such as PG Electroplast and EPACK Durable, which rely heavily on plastics and chemicals, are reportedly facing a supply cut. These companies use gas in their operations.

Impact of Gas Supply Constraints: Glass industry depends on gas

Big players in the glass industry like Borosil and Asahi India Glass are also reportedly facing a supply cut. If gas supply does not improve, production at these companies is likely to decline. Over 100 glass production units in Morbi have been shut down due to a gas shortage. Meanwhile, oil marketing companies (OMCs) have reportedly informed Borosil about the supply restrictions. These companies rely heavily on gas for glass production, especially to run the furnaces.

Impact of Gas Supply Constraints: PVC prices soar

PVC manufacturers, including Astral, Finolex, and Supreme Industries, are dealing with a sharp price hike. Since January, prices have climbed nearly 47 per cent, hitting around Rs 101 per kilogram. While companies may benefit from holding inventory, it is difficult to maintain these benefits over the long term.

Impact of Gas Supply Constraints: Chemicals sector hit by higher costs

The chemicals sector has also been affected by the rising crude oil and gas prices. Companies like Aarti Industries and Deepak Nitrite are facing higher expenses as due to increased petrochemical feedstock costs.

Impact of Gas Supply Constraints: Lubricant companies feel the pinch

Lubricant manufacturers like Gandhar Oil, Castrol and Gulf Oil are likely to see a rise in costs due to the increase in base oil prices.

Impact of Gas Supply Constraints: Auto industry sees indirect effects

The gas supply shortage could have an indirect impact on automobile companies such as Mahindra & Mahindra, Maruti and Tata Motors, as they use gas in processes such as painting and heat treatment.