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Gujarat Gas sales may take a hit as Morbi ceramic units plan shutdown in August

Sources in the country’s largest city gas distribution (CGD) company told FE that if the units at the Morbi ceramic cluster remain closed, GGL could see a decline of up to 50% in sales of natural gas on a daily basis.

Most of the ceramic units in Morbi use natural gas as their main fuel and GGL is the sole supplier to them.
Most of the ceramic units in Morbi use natural gas as their main fuel and GGL is the sole supplier to them.

By Nayan Dave

Sales of Gujarat Gas (GGL) are likely to be affected next month as the Morbi-based ceramic units have decided to go for a month-long shutdown to clear their existing inventory.

Sources in the country’s largest city gas distribution (CGD) company told FE that if the units at the Morbi ceramic cluster remain closed, GGL could see a decline of up to 50% in sales of natural gas on a daily basis.

Most of the ceramic units in Morbi use natural gas as their main fuel and GGL is the sole supplier to them.

“Inflated raw material costs, increased freight rates and shortage of containers have resulted in a fall in demand for ceramic products. Tile makers have huge unsold inventory at their warehouses. With a view to clear that inventory, ceramic units in Morbi have collectively decided to shut production for 30 days from August 10,” Haresh Bopalia, president of Morbi Ceramic Association, said.

Over the last five months, demand for ceramic products, including that of vitrified and wall tiles, have plummeted by 40%, Bopalia said. He added that due to the increased input and logistic costs, Indian ceramic makers are not able to compete with their Chinese counterparts in the global market.

Gujarat Gas clocked average sales of nearly 9.9 million standard cubic metre of gas per day (mscmd) during the quarter ended March, led by industrial sales of around 7.4 mscmd, CNG 2.2 mscmd, domestic 0.65 mscmd, and commercial 0.1 mscmd.

The Gujarat government-controlled listed company has 27 CGD licences across 43 districts in Gujarat, Maharashtra, Rajasthan, Haryana, Punjab, Madhya Pradesh, and Dadra & Nagar Haveli.

Th company holds the top spot in the CGD industry in terms of size and scale of operations with more than 17 lakh households, over 13,600 commercial customers, 711 CNG stations, more than 4,300 industrial units, and over 32,890 km of natural gas pipeline network.

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