Morbi Ceramic Industry Faces Natural Gas Price Hike; Shifts to Propane

Morbi: Gujarat Energy Ltd (GEL), formerly Gujarat Gas, has raised the industrial natural gas price for Morbi’s ceramic and tile industry by Rs 11 per standard cubic metre (SCM), from Rs 79 to Rs 90/SCM, excluding 6% VAT, effective September 2.

The hike has raised concerns among ceramic manufacturers, who fear higher fuel costs will further hurt their competitiveness in domestic and export markets.

Under the revised pricing, the Morbi tile category’s marine gas oil (MGO) price has been fixed at $28.294 per MMBTU, equivalent to Rs 90/SCM at an exchange rate of Rs 96 per dollar. Long-term gas users and sanitaryware units will get an Rs 8/SCM discount, bringing their September landing price to Rs 82/SCM.

Morbi’s ceramic industry, which has around 800 units, is increasingly shifting towards propane to manage gas price fluctuations. Industry sources said propane accounted for about 65% of the fuel mix in August, while GEL supplied around 35%. Propane’s share is expected to rise to 80% in September.

As per reports, natural gas prices, which averaged around Rs 48/SCM before the West Asia crisis escalated, have now risen to Rs 90/SCM, an increase of about 88%. Even with the Rs 8 discount, the price of Rs 82/SCM remains around 71% higher than the pre-crisis level. DeshGujarat