About 50 of the 600 ceramic units in the Morbi town of Gujarat have shut operations after Gujarat Gas and Indian Oil Corp (IOCL) stopped fuel supply to their units due to the West Asian war.
On Wednesday, Gujarat Gas invoked the force majeure clause on its gas supply agreements with industrial users as the supply of R-LNG (regasified liquefied natural gas) became severely constrained due to the impact of the war in the Middle East region. IOCL has already halted propane supply. Nearly 70-80% of the ceramic manufacturers depend on propane.
IOCL did not respond to ET’s emailed query.
Speaking to ET from Morbi, Khimji Kundariya, former president of the Morbi Ceramic Association, pointed out that the supply of crucial raw material for the industry, propane gas, is now stuck at the Hormuz Strait. Tile manufacturers, he said, can only go on until their individual stocks last, which ranges from some hours to 10 days at the best.
“Gujarat Gas has already informed us that it will be providing us with gas supply for 15 days and that too only half of what our consumption was in February,” Kundariya said. Iran’s blockade of Hormuz has disrupted fuel shipments from the Middle East.
“Nearly 50 units have shut down operations now. If the fuel shortage continues for the next week or 10 days, we may face a situation where the entire ceramic industry will have to suspend operations,” said Haresh Bopaliya, president of the Morbi Ceramic Manufacturers Association (Wall Tiles Division).
