Hindusthan Glass Submits Formal Objection to Petroleum Ministry Over Reduction in Gas Allocation Quota

Hindusthan Glass & Industries Limited Expresses Concern Over Potential Gas Supply Cuts

Hindusthan Glass & Industries Limited (HNGIL), India's largest glassmaker, has written to the Ministry of Petroleum and Natural Gas expressing concern over potential cuts in gas supply to industrial units in the wake of the ongoing war in the Middle East. The company has warned that such cuts could disrupt manufacturing capabilities, impacting essential sectors such as pharmaceuticals and Fast Moving Consumer Goods (FMCG).

Gas Supply Disruption Concerns

The Indian government has reprioritized gas supply following the force majeure situation arising from the war. Currently, priority is being given to retail uses, such as LPG cylinders for households and gas for vehicles. This has raised concerns for industrial users, including HNGIL, which relies heavily on gas supply for its manufacturing operations.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Potential Consequences

The company has estimated that an abrupt suspension of gas supply could result in significant loss of company assets, disruption of manufacturing capability, and interruption in supply to essential sectors. This could also endanger the lives and livelihoods of HNGIL's workforce, which currently employs approximately 4,000 workers and employees.

Government Measures to Mitigate Shortage

The government has initiated multiple measures to ensure adequate supply of gas. Alternate routes for Indian oil tankers are being explored to avoid the risk of traveling through the Strait of Hormuz. At least two oil tankers carrying LNG supplies are on their way to India, and more such tankers from alternate routes are expected in the near term.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Additionally, the government has announced that 20% of average monthly commercial LPG requirement will be allocated to industrial and commercial users in coordination with state governments. Union Minister for Petroleum and Natural Gas Hardeep Singh Puri has stated that gas shortfall has been substantially offset through alternative procurement, with large LNG cargoes arriving on an almost daily basis through alternative supply routes.

India's Gas Production and Supply Arrangements

India has sufficient gas production and supply arrangements to sustain its position even in the event of a prolonged conflict. Power generation for every household and for industry is fully protected. Qatar, India's biggest supplier of liquefied natural gas, accounting for 45% of gas imports into India, has declared force majeure and halted production following the strikes launched by Iran on gulf countries.