Select industries in Chakan, Bhosari MIDC to halt production as restrictions in LPG supply kick in amid West Asia conflict

Pune: Industries in parts of the district have started feeling the impact of a LPG supply restrictions triggered by the ongoing West Asia conflict, with several units in the engineering and powder-coating sectors already reporting disruptions in production.

A powder-coating unit in Chakan, Mass Precision Pvt Ltd, which employs around 250 workers, has halted operations since Friday due to the unavailability of LPG. Firm owner Rajesh Deodhare told TOI that although employees continue to report to work, production has come to a standstill due to shortage of fuel.




"I have been trying to procure LPG for the past four days, but distributors say there is no stock available for commercial consumers," he said. Deodhare added that his firm has a monthly turnover of about Rs7–8 crore and is incurring losses of nearly Rs25 lakh for every day production remains suspended.

"We faced a similar situation during Covid when production remained shut for nearly three months. Even when the business stops, we still have to pay workers' salaries and service our loan EMIs," he said, adding that the situation could worsen if supplies are not restored soon.

The situation is similar at Sahyadri Industries, another unit in Chakan engaged in manufacturing fabrication components, machined parts and sheet metal assemblies. Jaidev Akkalkote, owner of the firm, said production halted four days ago after LPG supplies ran out. "Around 10-15 workers are currently doing cleaning work inside the unit as there is no production activity," he said.

Both Akkalkote and Deodhare said they continue to pay their workers despite the shutdown as skilled labour is difficult to replace once employees leave.

The Union ministry of petroleum and natural gas has restricted LPG supply to non-essential users, prioritising domestic and emergency requirements. In a post on X on Monday, the ministry said domestic LPG supply to households has been prioritised and a 25-day inter-booking period has been introduced to prevent hoarding or black marketing.

It added that imported LPG for non-domestic use is being prioritised for essential sectors such as hospitals and educational institutions.

"For LPG supply to other non-domestic sectors, a committee of three EDs (executive directors) of OMCs (Oil Marketing Companies) have been constituted to review the representations for LPG supply to restaurants/hotels/other industries," the ministry said.

A senior official from Bharat Petroleum Corporation Limited (BPCL), speaking on condition of anonymity, told TOI that requests for bulk LPG supply from industries are currently being scrutinised. "Distribution is being approved only after verifying that the demand is linked to essential or emergency services," the official said.

Industrial units that rely heavily on LPG said their stock usually lasts only three to four days, raising concerns that more units could face shutdowns if fresh supplies are not restored soon.

Industry representatives said some units are exploring alternatives such as electric-powered ovens, but switching to such systems involves significant cost and installation of new machinery could take at least a month.

The situation is similar for the steel industry. "We have been seeking some intervention as operating the furnace without fuel supply will be a major problem," said Sakshi Katti, an executive at a steel producing unit in Chakan.

Their foundry has a total capacity of 200 tonne and is fully operated on LPG. It requires around 20 cylinders every two weeks. The manufacturing unit is left with only one week of LPG stock and is frantically trying to get hold of some supply, Katti said. The only other option is to operate the furnace on diesel, which is very costly.

Sandip Belsare, an engineering firm owner in Bhosari and president of the Pimpri Chinchwad Small Scale Industries Association, said more than half of the industries in the region rely on LPG. "Some units are exploring alternatives, but it is a costly and difficult process. I have ordered two electric-operated plasma machines for my own firm to explore an alternative," he said.

Kalyan Dekhale, owner of Rudra Veer Technologies, a powder-coating unit in Bhosari, said his firm has LPG stock that will last another two to three days. "If the supply is not restored, we too will have to halt operations. I have two units in Bhosari and Chakan employing 70-80 workers," he said.

The casting clusters in Pune-Pimpri Chinchwad, Nashik, Chhatrapati Sambhajinagar, and Kolhapur are heavily MSME-dominated. "Smaller foundries and die-casters that lack piped natural gas (PNG) connections are dependent on commercial LPG cylinders (35kg to 427kg) . Larger units may have transitioned partially to PNG or induction, but mid-tier operations remain highly exposed," said Vidhi Daryanani, secretary general, Aluminium Casters' Association of India.

"MSMEs can evaluate some alternatives depending on existing infrastructure and urgency by switching to light diesel oil, shifting to electric induction furnaces or natural gas, or reducing batch frequency," she added.

SITUATION IN A SNAPSHOT

- Engineering firms and powder-coating units are among most affected due to restrictions on LPG supply

- Electric-operated ovens for powder-coating units and plasma-cutter machines for engineering firms serve as alternatives in the absence of LPG

- However, industry members say switching to electric-operated machines is costly and takes time as a complete set-up has to be replaced

- Most industrial units keep LPG stock that can last for 3-4 days

- The Union ministry of petroleum and natural gas says it has formed a committee of three members to review demand by non-domestic users such as restaurants/hotels/other industries