Morbi is just beginning to a see a slow revival as inventories have exhausted
The Morbi tiles-category marine gas oil (MGO) price has been fixed at $28.294 per MMBTU, equivalent to Rs 90/SCM at an exchange rate of Rs 96 per dollar, according to a revised communication issued by GEL. “Fuel accounts for around 35-40% of production costs. Morbi has about 800 ceramic units producing tiles and sanitaryware, according to industry estimates. Of these, around 550 units use propane to manage fluctuations in natural gas prices.
Those dependent only on natural gas will not make any profit,” said Narendra Sanghat, president of the wall tiles division of the Morbi Ceramics Association. Manufacturers are also facing higher container freight costs and limited freight availability, which is further impacting overall competitiveness,” he said. “Propane is cheaper currently.
Industry sources said about 35% of Morbi’s gas requirement was sourced from GEL in Aug, while propane accounted for the remaining 65%. Propane’s share is expected to rise to around 80% in Sep, with GEL’s share potentially falling to 20%.
Manufacturers said the differential pricing could push more units towards propane and affect the competitiveness of Morbi’s ceramic exports. GEL has given a discount, but not all users get the same relief,” said ceramic tile manufacturer Nilesh Jetparia. He said manufacturers with piped gas connections already pay connection charges, while some have partially shifted to propane to manage input costs. Uniform relief would help manufacturers manage the increase in fuel costs,” Jetparia said.
“The relief should be available uniformly to all customers. International LNG prices have gone up. “Morbi exporters need competitive pricing in international markets.