GEL Raises Industrial Gas Price for Morbi Ceramic Industry

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

The revised pricing has triggered concerns among Morbi's ceramic manufacturers, who fear that higher fuel costs could further erode their competitiveness in domestic and international markets. According to GEL, the Morbi tiles-category 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 natural gas users and sanitaryware units have been given an Rs 8 discount, bringing their September landing price to Rs 82/SCM. Propane is currently cheaper than natural gas, and manufacturers dependent only on the latter will not make a profit, according to Narendra Sanghat, president of the wall tiles division of the Morbi Ceramics Association.

Morbi has about 800 ceramic units producing tiles and sanitaryware, with around 550 units using propane to manage fluctuations in natural gas prices. The differential pricing could push more units towards propane and affect the competitiveness of Morbi's ceramic exports, manufacturers warn.