PNG gas crisis hits Indore industries:Prices double, supply halved; 400 factories on verge of shutdown

The impact of rising tensions between Iran, Israel and the US is now clearly visible on Madhya Pradesh’s economy. Industries in Indore, known as the state’s industrial capital, are going through a difficult phase. The PNG (Piped Natural Gas) crisis in industrial areas has worsened the situation. PNG, which was promoted as an alternative to LPG, has now become a major challenge for industrialists. The main supplier, Avantika Gas Limited, has sharply increased gas prices and imposed supply limits, putting industrial production under stress. As a result, nearly 400 factories are on the verge of closure. How exactly is this crisis affecting MP’s industries, read in this report Prices doubled, ‘quota’ imposed on supply The last 15 days have been difficult for PNG consumers and traders in Indore. Mahendra Thakur, who has been using PNG for the past 25 years, said that gas which earlier cost around Rs 50–55 per unit is now priced at nearly Rs 100 — a direct 100% increase. According to Thakur, the problem is not limited to rising prices. Avantika Gas has also imposed a consumption limit. If usage increases due to production needs, higher rates will be charged on the additional consumption. This will directly raise production costs, the burden of which will ultimately fall on consumers. ‘Existential Crisis’ for MSME Industries Indore-based industrialist Harish Bhatia termed the situation as dangerous for the Micro, Small and Medium Enterprises (MSME) sector. He said industries were encouraged by the government to shift from cylinders to pipeline connections in the name of reducing pollution and improving convenience. However, now that industries are fully dependent on PNG, the supply company is acting arbitrarily. Bhatia added that Avantika Gas has issued a notice warning that prices could go up to Rs 130 per unit if availability declines. New Game of Collection in the Name of Security Deposit Industrialists allege that Avantika Gas Limited’s ‘arbitrariness’ does not end here. They claim that the company is now calling the security deposit paid 5–6 years ago insufficient. The company is demanding a fresh deposit equivalent to 40 days of the average bill. Industrialists say they are being threatened with supply disconnection if the amount is not paid. With business already slow and costs doubled, arranging lakhs of rupees as additional deposit is becoming difficult. They have urged the administration to intervene and stop such practices. Livelihoods of thousands of families at stake Around 300 to 400 small and large industrial units in areas like Sanwer Road, Polo Ground and Laxmibai Nagar in Indore are entirely dependent on PNG fuel. These include key sectors such as food processing, confectionery and metal industries. Industrialists warn that if gas prices reach Rs 130 per unit, these factories will not be able to compete in the market. In such a situation, closures are inevitable, putting thousands of workers at risk of losing their livelihoods. No shortage of gas, prices increased due to international market Manish Verma, Marketing and CNG Project Head at Avantika Gas Limited, said there is no need to panic over gas supply. He explained that the price hike and quota system are due to international market conditions. He said the company has a five-year long-term contract with upstream suppliers and is signing new agreements every month. To manage shortages, gas is also being procured from the spot market. He assured that supply will continue for 1.05 lakh domestic consumers, along with CNG and industrial users in Indore. What is the 55% Quota System Verma explained that a new system has been implemented across the country for industrial and commercial consumers. Under this, only 55% of the average consumption over the past six months is supplied at subsidised rates, while the remaining 45% is procured from international markets. The cost of this additional gas is directly passed on to consumers. Extra gas can be provided if required, but at higher rates. No Impact on Domestic and CNG Verma clarified that domestic and CNG consumers will not be affected for now. Gas for these categories is largely produced within the country, so prices remain stable. Letter Written to Avantika Gas Yogesh Mehta, President of the Association of Industries Madhya Pradesh, said a letter has been sent to Avantika Gas, requesting that prices should not be increased without prior notice. He added that the price hike is directly impacting industries, and the association has urged the company to reconsider both the increased rates and imposed restrictions.