Morbi Ceramic industry units to discuss strike option

Ahmedabad, 22 November 2013

Ceramic unit owners of Morbi may go on strike against gas price hike imposed by GSPC.

A group of around 70 Ceramic unit owners today held meeting with state industries minister Shri Saurabh Patel on the issue of gas.

Morbi contributes 85% of ceramic production in India. Gas price has been increased by 10% which comes to Rs. 5.17. This means Rs. 48.18 price and Rs. 1.30 crore added burden daily. GSPC wants 80% bill payment.

The unit owners said, “the suggested formula of 30 days of operation and 10 days of closer proposed by the state government is not acceptable to us.”

They further said, “we will hold a meeting in Morbi at hotel Dariyalal involving all our members and take decision on next course of action.”

It should be mentioned here that ceramic units of Morbi had started using gas supplied by Gujarat govt owner GSPC. Later GSPC had to buy more gas from international market which resulted into increase in gas price. When gas price reached Rs. 40 per standard cubic meter level, ceramic units stopped using gas and replaced it with coal-tar fuel which is byproduct of ceramic industry itself. However coal-tar usage is environment unfriendly. Following a public interest litigation(PIL), the Gujarat High Court in its recent verdict asked Ceramic units to replace coal with gas as fuel due to environment reasons.

As ceramic units had stopped usage of gas, GSPC had diverted gas supply to other units. After the high court order when ceramic units against came to GSPC for gas supply, GSPC showed inability and asked to accept rationing.

In its latest drive, the Gujarat Pollution Control Board (GPCB) on Tuesday told the Gujarat high court that 126 ceramic industrial units, which were earlier served with closure notice, had been shut near Morbi and Wankaner. Before this, 77 other such units were reportedly closed because they were run on coal gas furnace.

The whole issue:

-Ceramic industry wants government to give relief in hike of Rs. 4.17 in gas rates.

-The state government has guaranteed 24 hours supply only after getting assurance on per unit monthly gas usage.

-Against suddenly increased demand of 25-30 lakh cubic meter gas, GSPC will be able to supply only 19 lakh cubic meter gas. GSPC wants assurance that 80% of gas supplied will be utilized, otherwise what to do with high rate gas procured from abroad?

-If certain units one-by-one close their production for prescribed period, the the government can cut gas price hike to half.

-Another representation was on Rs. 2.5 price difference between Morbi and Than. GSPC has leveled the prices by not cutting Morbi gas rate, but by increasing Than gas rate.

-According to one ceramic unit owner, the units need to scale up and scale down production as per the demand. Some time all units don’t work for 15-20 days period. In such situation how they can give bond to government and give assurance.

-Unit owners say, they already face economic slow down and Chinese dumping. There are more than 600 ceramic products units in Morbi, Dhuva and Than areas. Gas prices always go up. Gasefire option was 70% cheaper which is banned by the Gujarat High Court.Now when usage of gas has been mandatory as per the High court order, and GSPC has increased gas price, the industry is facing major crisis.

-GSPC says that LNG price hike is thanks to increased demand. Gas arrives here from Australia and Qatar. Due to winter, demand is up. When international rate is high, we can’t do much. While for other industries the company has increased gas price by Rs. 2.50, ceramic units need more gas and therefore hike is as high as Rs. 4.17. If all 600 units start using gas, the demand will be at around 25-30 lakh cubic meter, against which GSPC is able to supply only 19 lakh cubic meter.