The recent move of Gujarat Gas to tighten the contract terms and conditions for gas consumers may be a cause for concern for the Morbi tile manufacturers. According to some gas manufacturers, the latest move of the gas supplier will create problems, especially for the small and marginal players.
Recently, Gujarat Gas revised the pricing for supply of gas for Morbi, according to which industrial consumers are now required to sign agreements with gas supplier for the minimum guaranteed offtake (MGO) for 15 days and deposit 80% advance. Gujarat Gas will be revising its minimum guaranteed offtake (MGO) every 15 days. For non-MGO agreements consumers are required to pay spot price of Rs 106/scm instead of Rs 62/scm (which has now increased to Rs 65/scm). This new rule is likely to put the small consumers into further difficulties. Also, according to new rule, for volumes above 5.5mn-6mn units, players have to pay spot prices. It should be noted that the gas price in the northern region is at Rs 40-45/scm and is linked to the movement of Brent crude.
Meanwhile, the exporters have indicated that there is not much improvement in the situation on exports front. It should be noted that monthly exports run rate has come down from Rs 1100 crore (up to July) to Rs 550 crore due to container unavailability issues. Further, container unavailability and Omicron scare have also affected project schedule as a result of which many expansion projects are running behind the schedule.