Mandi Gobindgarh steel mills seek fuel flexibility amid gas shortage

Patiala: Steel rerolling mills in Mandi Gobindgarh, Punjab's primary steel hub, have intensified their demand for "fuel flexibility" amid an unprecedented natural gas shortage, warning that rigid single-fuel policies could trigger a widespread industrial collapse.

The All India Steel Rerollers Association (AISRA) urged Punjab's industry minister, Sanjeev Arora, to introduce a temporary policy mechanism allowing MSME steel units to switch from Piped Natural Gas (PNG) to approved cleaner alternative fuels. According to AISRA, the steel cluster faced an effective 70% reduction in PNG supply, leaving most rolling mills able to operate only a few hours per day.




The curtailed supply was compounded by a recent price hike of approximately Rs 6 per standard cubic metre (SCM), escalating production costs. Industry representatives said that under the existing monopoly supply framework, there was no effective regulatory check on pricing.

Manufacturers claimed they absorbed daily losses running into lakhs of rupees, putting the survival of hundreds of MSME units at risk. AISRA sought a special, time-bound waiver to allow industries to temporarily bypass exclusive dependence on PNG. The association also sought intervention from the Punjab Pollution Control Board (PPCB) to permit the use of verified cleaner alternative fuels, while ensuring environmental norms remained intact and operations continued.

AISRA said the industry was not seeking a return to highly polluting fuels, but a regulated, environmentally compliant shift to transitional energy sources until gas supplies stabilised. AISRA national president Vinod Vashisht, said, "We have urged the Industry Minister and PPCB as well and sought temporary relaxations and flexibility for using alternative fuel like coal gasifiers and bio-fuel etc. which creates less pollution".

He explained that "Under the Gas Sale Agreement (GSA), units are technically permitted to utilize up to 120% of their Daily Contract Quantity (DCQ). Despite this 120% provision (20 percent extra over fixed demand), industries were initially directed to reduce their consumption to only 50% of their Fixed Demand.

The situation has since deteriorated significantly, with units now facing an effective reduction of nearly 70%. This level of reduction is neither fair nor acceptable for the operational survival of the industries". The association warned that failure to grant fuel flexibility could set off a domino effect across the region's industrial ecosystem. It said a prolonged shutdown of the steel cluster would dent state revenues and jeopardise thousands of jobs, with daily wage workers already facing loss of income due to reduced operational hours.

Industrialists requested an urgent meeting with the minister to discuss what they described as "extremely critical" circumstances threatening the viability of the state's steel manufacturing backbone. If approved, the proposed waiver would mark a shift from a rigid single-fuel mandate to a multi-fuel approach during periods of energy disruption, potentially setting a precedent for crisis-driven industrial reforms in Punjab.

Administrative secretary (Industries and Commerce) Gurkiratpal Singh said, "We are looking into the matter and studying it thoroughly as this issue is related to NGT. There are certain competent authorities which can allow this to be done. We are studying the past orders related to this to come out with final decision on this issue after discussions".

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