The Centre’s decision to ramp up industrial gas supplies has helped ease fears of production disruptions across the automobile sector, with manufacturers indicating that operations are secure at least until mid-April.
Automakers have informed the Ministry of Heavy Industries that the situation is currently under control, with sufficient inventory and supply visibility ensuring uninterrupted production. “In the consultations that we had with industry players, OEMs informed us that the situation is now under control and there will be no production halt or disruption till around April 10–15,” a senior government official said.
Echoing this view, a senior executive at a major automobile original equipment manufacturer (OEM) said there is “no likely chance of any disruption till April 15,” underlining industry confidence in existing stock levels. However, the executive added that the situation beyond that timeline will depend on production demand and capacity utilisation, as gas consumption is closely tied to manufacturing activity.
Supplies unlikely to come to a complete halt
Officials indicated that even after mid-April, supplies are unlikely to come to a complete halt. While some companies may face intermittent challenges depending on availability, a widespread shutdown across the sector is not anticipated. The ministry remains in close coordination with OEMs to monitor developments and address any emerging supply-side concerns.
As part of a broader response, the government has also advised manufacturers to transition factory operations from oil-based fuels to electricity where feasible, and to explore the use of recycled aluminium and alternative materials amid rising costs and potential shortages.
Key relief measure
In a key relief measure, the government on Friday increased commercial LPG allocations to 70%, up from 50% earlier, to support industries impacted by supply disruptions linked to the ongoing geopolitical tensions in West Asia.
Earlier this month, concerns over a potential gas supply crunch had intensified, with industry bodies such as the Society of Indian Automobile Manufacturers and the Automotive Component Manufacturers Association of India flagging the risks to production and exports in communications to the government. The sector relies heavily on piped natural gas, LPG and propane for heat-intensive processes such as casting, forging and paint operations.
The Society of Indian Automobile Manufacturers had also highlighted the West Asia conflict as a key concern during its recent monthly sales update, warning of potential supply chain disruptions in the months ahead, even as domestic vehicle dispatches remained robust in February.