20% gas cut cripples Mandi Gobindgarh’s rolling industry; mills scale down production, lay off workers

Patiala: Mandi Gobindgarh, known as the ‘Iron and Steel Town of Asia', faced a deepening industrial crisis after a 20% curtailment in Piped Natural Gas (PNG) supply forced rolling mills to scale down production and lay off workers.The supply cut was attributed to geopolitical tensions in the Middle East and subsequent disruptions in global energy chains, which severely impacted the steel hub's gas-dependent units and threatened livelihoods and output.Industrial stakeholders reported that the govt-mandated restriction capped gas supply at 80% of the average industry-wide consumption recorded over the past six months. Bhavya Gupta, manager at IRM Energy, said, "We are currently authorized to supply only 80% of the average consumption. As the domestic and CNG segments are being prioritized for full supply, the industrial usage remains capped."The restriction hit rolling mills particularly hard as their operations depended on continuous high-temperature heating. Prominent industrialist and President of All India Steel Re-roller Association, Vinod Vashisht, said the newly introduced daily averaging system left little room for operational flexibility. "If a unit exceeds its allotted consumption, it faces penalties. If it consumes less, that unused portion cannot be carried forward. The system effectively punishes both excess and under-utilization," he said.Industry estimates indicated that nearly 20% of the workforce, primarily daily-wage labourers, was already laid off. Overall output dropped by at least 20%, with some mills fulfilling barely half of their customer commitments. Industrialists claimed that in at least one major unit, the workers were reportedly sitting idle due to insufficient gas supply. Local industry representatives warned that prolonged curtailment could trigger further job losses and long-term damage to the region's industrial ecosystem."With 20% cut in gas supply, the output at the re-rolling mills reduces up to 50% and in future if the PNG supply is further reduced to 50% then the re-rolling industry will have to shut operations as it cannot operate at 50% gas supply. The workers on daily wages have been laid off up to 20%," said Vinod Vashist.The crisis was compounded by compliance obligations under directives of the National Green Tribunal, which required nearly 160 industrial units to transition from coal-fired furnaces to PNG to curb air pollution. Industrialists said the transition proved financially burdensome, with installation of gas-based furnaces ranging between Rs 1 crore and Rs 2.5 crore per unit. Coal prices reportedly surged to nearly Rs 24 per kilogram, while PNG rates escalated to approximately Rs 49.50 per SCM after recent surcharges.Industrialist Abhay said units that invested heavily in PNG infrastructure now found themselves locked into a costly system. "Once you shift to gas, reverting to coal is neither easy nor economical. It could take six months and an additional Rs 3 crore, besides regulatory approvals," he observed."The rates of PNG recently increased by Rs 6 per SCM reaching to Rs 49.5 per SCM. Earlier the industry has to pay Rs 6 per kg extra cost for using PNG above the allotted quota on monthly basis however this has been changed to daily quota with Rs 45 per kg extra cost for using gas above the daily allotted consumption," added Vashisht.SCCI general secretary K K Jindal in Mandi Gobindgarh said, "Although steel and furnace industry is impacted due to shortage of commercial cylinders, but the re-rolling mills, already struggling, are now on verge due to PNG crisis. There are around 150 re-rolling industries in Mandi Gobindgarh which contributes to large employment including daily wagers".In response, IRM Energy proposed a zonal operational model under which different clusters of industries would operate on designated days, aiming to allow mills to function at full capacity for three to four days a week rather than operating inefficiently at reduced capacity every day. "We are ready with a proposal to divide the industry in different zones and provide the gas thrice a week zone wise at full capacity instead of 80 percent supply", said IRM Energy manager Bhavya Gupta.However, as of Friday evening, no formal revision in supply curtailment was announced. With nearly 120 gas-dependent industrial units in Mandi Gobindgarh facing uncertainty, industry leaders cautioned that unless relief measures were introduced soon, the crisis could inflict lasting structural damage on one of Punjab's most vital manufacturing hubs.