OilMin cuts natural gas supplies to small industry in Gujarat

Oil Ministry has cut natural gas supplies to small industries in south Gujarat by 60 per cent to feed CNG demand, a move that has threatened their survival and is being seen as a contravention of the stated policy.
The ministry had recently decided to meet 100 per cent gas requirement for CNG and piped cooking gas supplies in cities of firms like Indraprastha Gas Ltd, from domestic production. This was to be ensured by cutting domestic gas supplies to non-priority sectors.
In furtherance to this, APM gas or regulated production of ONGC/OIL to 30 small industries in South Gujarat was late last month cut by almost 60 per cent, threatening their survival as they cannot afford imported LNG that costs four times the domestic gas price of USD 4.2 per million British thermal unit.

The move is seen as contravention of the Cabinet-approved June 20, 2005 policy that in "public interest" had decided that "all available APM gas would be supplied to only the power and fertiliser sector consumers against their existing allocation along with the specific end users committed under court orders/small scale consumers having allocation up to 0.05
million standard cubic meters per day".
In case of reduction in supplies, pro-rata cuts were to be applied on all APM consumers.

South Gujarat Small Gas Consumers Association has written to Oil Minister Dharmendra Pradhan saying the 30 small glass consumers in South Gujarat including Pragati Glass, Piramal Glass, Haldyn Glass, Gujarat Borosil and Savana Ceramics are facing closure due to the cut announced by GAIL in the Administered Price Mechanism (APM) natural gas supplies.

The Association, in an October 1 letter, said it had represented the case of small industries to Pradhan on September 25 where Pradhan assured to get the matter examined.
"However, to our utter shock, the very next day GAIL abruptly curtailed gas supplies to South Gujarat consumers by 58 per cent, thus pushing these small consumers to the brink of closure," it wrote.
It pointed out the 'Guidelines for Allocation of Domestic Gas to City Gas Distribution (CGD) Entities', which were issued in compliance with a Gujarat High Court order seeking parity in supplies to all CNG firms across the country, stated that additional requirement of gas will be met by imposing proportionate cut on all APM/PMT field customers in the non-priority sectors.