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Business News/ Companies / Piramal Glass, others shut units after GAIL cut gas supplies
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Piramal Glass, others shut units after GAIL cut gas supplies

GAIL last month selectively slashed gas supplies to small industries to meet fuel requirement of CNG and PNG supplies in cities

To meet city gas requirement, GAIL was to pro-rata cut gas of non-priority sectors like steel and refineries but ended up snapping nearly 60% supplied to small industries. Photo: Pradeep Gaur/MintPremium
To meet city gas requirement, GAIL was to pro-rata cut gas of non-priority sectors like steel and refineries but ended up snapping nearly 60% supplied to small industries. Photo: Pradeep Gaur/Mint

New Delhi: State-owned GAIL (India) Ltd’s drastic cut in natural gas supplies to small industries in south Gujarat has led to few gas units like Piramal Glass shutting down part of their operations.

GAIL last month selectively slashed gas supplies to small industries to meet fuel requirement of CNG (compressed natural gas) and PNG (piped natural gas) supplies in cities. The company on 27 September cut supplies to 30 industries in south Gujarat but did not touch small users in other states.

To meet city gas requirement, GAIL was to pro-rata cut gas of non-priority sectors like steel and refineries but ended up snapping nearly 60% supplied to small industries, which as per a June 2005 order of oil ministry were clubbed with priority users in power and fertilizer for fuel supplies. No subsequent order has defined non-priority users.

Piramal Enterprises Ltd vice-chairperson Swati Piramal last week wrote to Gujarat chief minister Anandiben Patel against the “discriminatory" action of GAIL that has led to her firm and others like Pragati Glass, Haldyn Glass, Gujarat Borosil and Orient & Savana Ceramic shutting down few lines in their plants.

“This action by GAIL works a little contrary to the ‘Make in India’ programme recently launched by Prime Minister Narendra Modi. While on the one hand the Government of India is committed to increase job opportunities and get foreign investment by transforming India into a manufacturing hub, on the other hand the decision to cut gas impacts the viability of operating units that have been contributing to the nation for decades," she wrote on 23 October.

The total allocation to 30 small consumers in south Gujarat is a mere 0.6 million standard cubic metres per day (mmscmd). The cut has made available only 0.35 mmscmd available for PNG/CNG use.

In absence of domestic gas, the small units have to buy imported LNG (liquefied natural gas) which costs four times the domestic rate.

“Reducing the gas from small consumers singularly from with the state (of Gujarat) and diverting it to city gas is discriminatory especially when the priority of both sectors were equal," she wrote. “We earnestly urge that small gas consumers should be treated as priority (user)."

She asked Patel to impress upon Union petroleum ministry to not apply a unilateral cut on the small consumers of south Gujarat, who individually have allocation of no more than 50,000 cubic meters per day, but impose an “equal and pro-rata cut across all APM (or administered price gas) users in the country to fulfil the shortfall to the city gas."

“By doing this, the impact on small gas consumers would be minimal (may be 1% compared to present 58% cut). This would ensure the future viability of the industry and revenues for state of Gujarat and the needs of city gas will also be fulfilled," Piramal added. PTI

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Published: 30 Oct 2014, 09:24 PM IST
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