PNG supply to industries capped at 80% of usage to meet domestic demands

Indore: Industries across Madhya Pradesh are bracing for higher costs and possible production adjustments after piped natural gas (PNG) supplies to industrial and commercial consumers were capped at 80% of their average gas consumption over the past six months, a move aimed at diverting and prioritising domestic gas supplies following disruptions linked to the ongoing Middle East conflict.City gas distributors across major industrial centres have begun implementing the directive. In Indore and surrounding areas, Aavantika Gas Limited has informed industrial customers that the restriction will take effect from 6 am on March 12, in compliance with the ministry's order dated March 9. In Dewas and Bhopal industrial belts, similar communications have been issued by GAIL to industrial consumers.Under the notification, gas supply to industrial and commercial customers will be restricted to 80 per cent of their past six-month average consumption, subject to operational availability.Industry representatives said the curbs could impact operations across several clusters including Sanwer Road, Palda, Kila Maidan and Polo Ground in Indore, where thousands of MSMEs operate.Yogesh Mehta, president, Association of Industries in Madhya Pradesh (AIMP), said a significant section of MSMEs rely on PNG as a primary energy source. "Confectionery, plastic and several MSMEs use PNG supply. Now it would be capped to 80 per cent of their average usage in the past six months, and any additional consumption would be priced heavily. For MSMEs it will not be possible to pay such pricing and this means the capping will hit production capacities," he said.Industry bodies estimate that around 4,000 MSMEs operate across the major industrial areas of Indore, of which roughly 15 per cent units use PNG for manufacturing processes such as heating, processing and packaging.Girish Mangla, director, Association of Industries Dewas, said the supply restrictions add to the pressures industries are already facing due to global tensions. "The Iran-Israel war has left industries scrambling for raw materials and the cascading impact is huge. The curtailment in PNG supply to industries will further hit industrial operations," he said.A communication sent by GAIL to industrial customers in Dewas stated that the restriction has been imposed in view of the ongoing conflict in the Middle East and the resulting supply uncertainty. Referring to the Gazette notification issued by the petroleum ministry, the letter informed industries that gas supply to all industrial and commercial customers would be restricted to 80 per cent of their past six-month average consumption.Industries have been asked to immediately restrict gas drawal within this limit. The communication also warned that any consumption beyond the restricted quantity would be billed at significantly higher spot market prices.An official communication sent to PNG consumers in Indore stated that base gas prices for industrial and commercial users would increase by Rs 1 per standard cubic metre for consumption within the 80 per cent limit, while consumption beyond that threshold would be billed at the actual upstream supplier price."Beyond the 80 per cent limit, gas will be billed at the actual upstream price, which is linked to spot market rates and could be around $22–23 per MMBTU, translating to nearly Rs 96 per SCM excluding taxes," the communication said.Dinesh Mishra, a senior executive at a film packaging company in Pithampur, said industries may have to opt for premium pricing to maintain full operations. "We will have to pay the premium pricing to obtain 100 per cent supplies to smoothly run operations. This would mean an additional cost of at least Rs 1,000 per day due to the higher PNG price, but at least we are getting uninterrupted supplies and that will help industries keep running," he said.Industries in the Mandideep industrial area near Bhopal have also been affected by the curbs. Rajeev Agrawal, president of the Association of All Industries, Mandideep, said the restriction has created operational challenges for several units."GAIL has capped the PNG supply to industries at 80 per cent of the past six months' average consumption. Many industries have fluctuating production cycles, so their current requirement may be higher than the past average. This restriction has adversely impacted several units," Agrawal said.Manufacturers said many units had shifted to PNG in recent years because it is cleaner and operationally efficient compared to furnace oil or coal but the present curbs may force some industries to reassess energy options or scale down output if the restrictions continue.