Gujarat Gas Reduces Piped Natural Gas Price to Rs 77 Per Cubic Metre for Morbi

Gujarat Gas Limited has reduced the price of piped natural gas (PNG) for the Morbi ceramic cluster following negotiations with industry stakeholders, offering partial relief to manufacturers affected by rising fuel costs. The revised rate comes after concerns were raised by the Morbi Ceramics Manufacturers Association and discussions with government authorities over the viability of operations in the region.

The price of PNG, which was earlier set at Rs 88 per standard cubic metre (SCM) from April 1, effectively reaching around Rs 93 per SCM, has now been reduced to Rs 77 per SCM. While the reduction eases some pressure, industry players have pointed out that the revised rate remains significantly higher compared to alternative fuels previously used.

Despite the revision, PNG continues to be about 48% more expensive than propane-LPG, which was available at approximately Rs 52 per SCM before supply disruptions. The price cut, however, has narrowed the gap between regular PNG users, such as sanitaryware units, and tile manufacturers returning to PNG, reducing the difference from Rs 23 to Rs 7 per SCM and bringing some level of parity within the sector.

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Industry representatives have clarified that the reduction in gas prices will not lead to a decrease in the cost of ceramic products. The association had already increased retail prices of ceramic goods by 30% to 50% on April 15, citing elevated input costs, and has stated that these rates will remain unchanged despite the latest development.

The challenges faced by the Morbi cluster stem from disruptions in fuel supply caused by geopolitical tensions, particularly the blockade of the Strait of Hormuz. The situation led to shortages of imported fuels, including propane-LPG and natural gas, both of which are critical for the ceramic manufacturing process in the region.

The Morbi cluster, which accounts for nearly 90% of India’s ceramic production, had witnessed a shutdown beginning March 17 due to the fuel crisis. While the revised PNG pricing offers some operational relief, industry stakeholders indicate that higher energy costs will continue to impact production economics, keeping end-product prices elevated in the near term.

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