Gujarat Industries Petition Oil Minister Against GAIL

New Delhi: With firms like Piramal Glass having to shut down part of their operations after gas supply cuts, Gujarat industries have sought Oil Minister Dharmendra Pradhan's intervention to stop "arbitrary" action of GAIL that may lead to 30,000 job losses.

GAIL last month selectively slashed gas supplies to small industries in Gujarat to meet fuel requirement of CNG (compressed natural gas) and PNG (piped natural gas) supplies in cities. It, however, did not touch small users in other states.

In a presentation to Mr Pradhan, South Gujarat Small Gas Consumers Association said, "Action of GAIL is palpably arbitrary and targeted against specific small consumers of South Gujarat."

After Gujarat High Court order, GAIL was to pro-rata cut gas of non-priority sectors like steel and refineries to meet city requirement but ended up snapping nearly 60 per cent supply to small industries, which as per a June 2005 order by the Oil Ministry, were clubbed with priority users in power and fertiliser for fuel supplies.

No subsequent order has defined non-priority users.

"While High Court has directed to remove discrimination and arbitrariness in supply of gas to Gujarat city gas distribution (CGD), the discrimination now extends from Gujarat CGD to small industries of South Gujarat," the association said.

GAIL, it said, has neither provided any specific order of the government nor details of the customers whose supplies have been cut.

It said the government policies provide that all APM or gas from regulated fields is to be supplied only to power and fertiliser consumers along with court mandated/small gas consumers having allocations up to 0.05 million standard cubic meters per day.

"To meet the additional requirement of gas for CGDs, a pro-rata cut on (gas from) Panna-Mukta and Tapti (fields) may be applied," it said, adding that alternatively, a pro-rata cut on all the domestic gas would be appropriate.

Recently, Piramal Enterprises Ltd vice-chairperson Swati Piramal had written to Gujarat Chief Minister Anandiben Patel against the "discriminatory" action of GAIL that has led to her firm and others, like Pragati Glass, Haldyn Glass, Gujarat Borosil and Orient & Savana Ceramic, shutting down few lines in their plants.

"This action by GAIL works a little contrary to the 'Make in India' programme recently launched by Prime Minister Narendra Modi."

"While on the one hand, the Government of India is committed to increase job opportunities and get foreign investment by transforming India into a manufacturing hub, on the other hand the decision to cut gas impacts the viability of operating units that have been contributing to the nation for decades," Piramal Enterprises vice chairperson Swati Piramal wrote on October 23.

Total allocation to 30 small consumers in south Gujarat is a mere 0.6 mmscmd. The cut has made available only 0.35 mmscmd available for PNG/CNG use.

In absence of domestic gas, the small units have to buy imported LNG (liquefied natural gas) which costs four times the domestic rate.

"Reducing the gas from small consumers singularly from the state (of Gujarat) and diverting it to city gas is discriminatory, especially when the priority of both sectors were equal," she wrote. "We earnestly urge that small gas consumers should be treated as priority (user)."

She wanted an "equal and pro-rata cut across all APM (or administered price gas) users in the country to fulfil the shortfall to the city gas."

"By doing this, the impact on small gas consumers would be minimal (may be 1 per cent compared to present 58 per cent cut). This would ensure the future viability of the industry and revenues for state of Gujarat and the needs of city gas will also be fulfilled," Ms Piramal added.