Karnataka Industries Adjust Operations Amid Shift in LPG Distribution Policy

Karnataka Industries Disrupted by LPG Cylinder Shortage

A shortage of commercial LPG cylinders is affecting various industries across Karnataka, forcing some units to reduce production or temporarily shut operations. The supply constraints are linked to global fuel disruptions triggered by the Iran war.

Key Statistics:

• Over 30% of units in the Peenya industrial cluster have been affected by the shortage.
• 30% of units have not received cylinders for the past week, according to U Sathyanarayana, council member of Peenya Industries Association (PIA).
• Around 20 times more for air freight compared to sea freight, which could increase input costs and reduce margins.

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Impact on Industries:

The shortage is affecting a wide range of sectors, particularly fabrication and metal-processing units that depend heavily on LPG for operations such as gas cutting and heat treatment. Factories are operating in reduced shifts, and some have suspended operations altogether.

Companies Affected:

• Huli, India's first jaggery-based rum brand, has announced that it will halt operations from Monday due to the inability to procure LPG required to run its boiler.
• Small businesses, such as a sports and gifts shop in Balepet, have stopped producing 3D-embossed medals for shields and trophies due to the lack of LPG cylinders.

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Industry Bodies Seek Intervention:

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has flagged supply constraints affecting businesses. FKCCI has written to Karnataka Electricity Regulatory Commission (KERC) requesting that penalties for higher power consumption be waived if hotels switch from LPG to electric cooking during the shortage. The FKCCI has also written to Hindustan Petroleum Corporation Limited (HPCL) after receiving complaints from dealers about fuel distribution.