West Asia crisis triggers PNG cut, MP units warn of production curbs

Indore: Amid the ongoing West Asia crisis disrupting global LNG supplies, industrial units across Madhya Pradesh are facing a fresh energy squeeze, with piped natural gas (PNG) supply capped at 65 percent of average consumption, down from 80 percent. Industry bodies say the move is already forcing production cuts and sharply raising fuel costs. Manufacturers said the reduction in gas allocation has directly impacted production capacities, particularly in sectors such as pharmaceuticals, food processing, plastics, packaging, engineering and chemicals that depend heavily on PNG for boilers, heating and continuous manufacturing processes.Industry representatives pointed out that Madhya Pradesh is a major hub for MSMEs with thousands of units operating from industrial clusters such as Pithampur, Dewas, Mandideep and Malanpur. A large number of these units depend on PNG and other fuels for daily operations, and the production cuts are now squeezing margins and affecting manufacturing schedules.Rajeev Agrawal of the Mandideep Industrial Association said the reduction in supply and sharp increase in fuel prices are hurting industries across clusters. "Industries are already dealing with higher raw material prices and logistics costs. The cut in PNG supply and the steep increase in fuel prices are directly affecting production and making operations extremely difficult for many units," he said.The restrictions come amid disruptions in liquefied natural gas (LNG) supplies linked to the ongoing West Asia crisis. In a letter dated March 19 to the Association of Industries Dewas, GAIL said the overdrawn quantity of PNG for industrial consumers would now be calculated on the basis of spot prices due to geopolitical disruptions affecting LNG shipments.Industrial units have also received communications from a PNG supplier declaring a force majeure condition following supply disruptions from upstream LNG suppliers due to the Middle East crisis. The communication stated that from March 20, gas supply to industrial and commercial consumers would be restricted to 65 percent of their average consumption based on the past six months' usage.Industries said the financial impact is severe as the normal contractual price of PNG is around Rs 72 per SCM, while consumption beyond the capped quantity is being billed at spot rates of around Rs 125 per SCM or higher, and the price continues to rise.Girish Mangla of the Association of Industries Dewas said the sharp increase in gas prices is placing enormous pressure on manufacturers. "PNG rates have increased further and this is a huge burden on industries. Raw material prices and logistics costs have already gone up and on top of that such a sharp spike in PNG prices has left industries shattered," he said.Yogesh Mehta, president of the Association of Industries in Madhya Pradesh (AIMP), warned that many units may not be able to sustain operations if the situation continues. "Industries cannot run in these conditions. We understand this is a geopolitical situation, but it is killing industries. If the situation continues, many units may be forced to shut down after March," he said.Industrialists said consistent and predictable energy supply is critical for maintaining production schedules, especially for MSMEs operating on thin margins. They have urged authorities to restore the earlier 80 per cent supply cap and provide relief to prevent disruption in industrial activity and job losses.