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Sanand Industries Hit by LPG Price Hike, Production Drops Up to 25%

Industrial production in Sanand GIDC has declined significantly following an increase in commercial LPG cylinder prices, with units reporting severe fuel shortages disrupting operations. The President of Sanand GIDC, Ajit Shah, states that engineering units have seen a 20-25% decrease in output. A CRISIL report warns that higher input costs and supply constraints, partly due to geopolitical conflict, pose downside risks to industrial momentum. While healthy domestic demand provides a current buffer, prolonged uncertainties could delay recovery in private sector investment.

Key Points: LPG Price Hike Cuts Sanand Industrial Production by 20-25%

  • Production drops 20-25%
  • LPG price hike & supply shortages
  • CRISIL warns of industrial risks
  • Geopolitical conflict impacts input costs
  • Domestic demand provides a buffer
2 min read

Production drops up to 20% in Sanand GIDC as LPG price hike hits industrial units: Sanand GIDC President

Sanand GIDC reports major production drops as commercial LPG cylinder price increases cause fuel shortages and disrupt manufacturing lines.

"Engineering units using LPG in production have seen a 20-25% decrease. - Ajit Shah"

Sanand, April 1

Industrial production in Gujarat's Sanand GIDC has declined following an increase in commercial LPG cylinder prices, with units reporting disruptions due to fuel shortages, an industry representative said.

Ajit Shah, President of Sanand GIDC, said, "There has been a decline in production. For instance, if my production output today stands at 100 units, it has now dropped to around 80 units."

He attributed the slowdown to supply issues affecting operations, stating, "The reason for this is that my operational lines, specifically the welding lines or other cutting lines, are experiencing severe shortages."

Highlighting the broader impact on engineering units, Shah added, "Engineering units using LPG in production have seen a 20-25% decrease."

The rise in commercial LPG prices has raised concerns among industrial units, particularly those dependent on gas for manufacturing processes, as supply constraints and higher input costs continue to affect output.

A recent report by the rating agency CRISIL also flagged emerging risks that could weigh on industrial momentum. "A combination of higher prices and tighter supply of critical inputs due to the ongoing conflict in West Asia has imposed downside risks to industrial output," it said.

Energy costs, in particular, have become a growing concern for manufacturers. "The surge in energy prices is another key challenge faced by manufacturers... Rising input costs are emerging as a key pressure point, and uneven pricing power across firms may limit their ability to fully pass through costs," the report added.

The report also highlighted that gas availability constraints could disrupt output in sectors dependent on such inputs, with supplies being rationed.

Despite these headwinds, domestic demand continues to provide some cushion. "Healthy domestic demand scenario, though, provides a crucial buffer currently," it noted.

Crisil further cautioned that prolonged geopolitical uncertainties, particularly in West Asia, could impact investment decisions and delay recovery in private sector spending.

Overall, while manufacturing-led growth has kept industrial output resilient, rising energy prices and supply-side constraints remain key risks going forward.

- ANI

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Reader Comments

P
Priya S
My uncle runs a small fabrication unit in Sanand. He's been saying the same thing for weeks. The LPG price hike has squeezed his margins completely. He's had to let go of two temporary workers. It's a ripple effect that starts with fuel and ends with families.
R
Rohit P
While the geopolitical situation is a factor, we also need better long-term planning. Over-reliance on imported energy makes us vulnerable. Where is the push for solar or other alternatives for industrial heating? 'Make in India' needs affordable energy to succeed.
S
Sarah B
Reading this from a supply chain perspective. A 20% drop in production at a key industrial estate doesn't just stay local. It delays orders for companies across India and could affect export commitments. This needs urgent intervention.
V
Vikram M
The CRISIL report hits the nail on the head. It's not just price, but availability. If cylinders are being rationed, how can factories run at full capacity? This will hurt Gujarat's GDP numbers. Hope the state and central governments are having talks with gas companies.
K
Karthik V
Respectfully, while the situation is tough, industries also need to innovate and improve efficiency. Can't always depend on government subsidies. Time to invest in energy-efficient technologies. Short-term pain for long-term gain.
A

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