A latest decision by the gas distributor, GAIL of curtailing gas supplies to manufacturing units in South Gujarat is feared to leave many glass and ceramics units non-functional and render thousands jobless.
Following revised guidelines by the Petroleum and Natural Gas Regulatory Board (PNGRB), GAIL has been authorized to divert domestic gas from non-priority sector to meet the requirement of compressed natural gas (CNG) and piped natural gas (PNG) segments as per their actual consumption.
Considering the PNGRB guideline issued on August 20, GAIL has decided to cut domestic gas (administered price mechanism gas) supplies by 58 per cent to over 30 glass makers beginning September 16.
“The decision would force companies to depend on either imported RLNG or furnace oil which are almost four times costlier than the APM Gas. This will lead to losses for the companies,” said Ashok Jain, vice-president, South Gujarat Small Gas Consumers' Association (SGSGCA). Total gas allocation to these companies is about 0.6 million metric standard cubic meters per day (MMSCMD), which will be reduced to 0.35 MMSCMD.
Companies that will be affected with reduction in gas supplies include Pragati Glass, Piramal Glass, Haldyn Glass, Gujarat Borosil Ltd, Schott Glass and Belgium Ceramics among others.
“We will fight against the decision and if it yields nothing, will stop production,” said Jain, who is the director of Gujarat Borosil Ltd, which manufactures low iron textured solar glass for photovoltaic panels in solar projects. With an annual turnover of Rs 133 crore, Gujarat Borosil is the only producer of solar glass in India and any reduction in its production would adversely affect Centre’s National Solar Mission, claimed Jain.
With stoppage in production at these companies, about 100,000 people will lose their jobs, while economic loss will be huge. The companies put together have an annual turnover of Rs 5,000 to Rs 6,000 crore. The sector figures among the last in priority list for APM gas distribution.
“GAIL is seeking to implement a major cut in gas supply to these consumers which shows absolutely no concern for industry. This runs counter to the target “Make in India – Made in India” boldly announced by the newly installed Government at the Centre under the leadership of Hon’ble Shri Narendra Modi who has taken the goal of making India a manufacturing hub in Asia,” an SGSGCA statement said.
SGSGCA termed the proposed action of GAIL and the directions of PNGRB ill-conceived, arbitrary and unjustified and ignoring the fact that these small gas consumers have set up their factories in isolated and small rural areas based on availability of gas.