Saturday, Nov 22, 2014

For Firozabad glass units, gas price hike a real worry

Written by Subhomoy Bhattacharjee | Agra/firozabad | Posted: April 20, 2014 11:53 am

IN Uttar Pradesh’s largest belt for small industry, the glass manufacturing units of Firozabad-Agra the prospect of a doubling of gas prices is now the biggest concern for the mill owners.

Mohanlal Agarwal, president of the UP Glass Manufacturers Syndicate told The Indian Express, “Most of Firozabad glass units will have to close down if the price of natural gas is doubled by the government.”

But as he and others pointed out, none of the major candidates from the constituency have flagged this concern. The Firozabad glass industry employs about 25,000 workers, all drawn from the rural areas from around the town, just 40 kilometres south of Agra.

Of the 300 odd glass units in the region, the largest 185 run on gas as fuel to fire the kilns. From April 1, 2014 the Central government had planned to allow gas producers primarily in the offshore KG-D6 basin to raise the price to about $8.4 per mmBtu from the current $4.2. But this has been stayed by the Election Commission till the Model Code of Conduct is in play.

The glass industries in this town that forms part of the Agra-Tundla-Firozabad manufacturing belt, had migrated to gas on environmental concerns from 2002 onwards, since the emissions from the glass works were corroding the Taj Mahal.

State-run Gail India provides gas supply to these units. According to Hanuman Prasad Garg, president of the Glass Industrial Syndicate, gas prices are the principal determinant of the cost of the product of these units.

He said for a tola of bangles that would fetch between Rs 60 and 70 in the market, gas price now accounted for 25 per cent of the cost of production. It would shoot up to about 42 per cent with the new gas price, he said.

But while the owners are apprehensive, they do not find the candidates articulating the concerns. Garg laughed and said “they have other issues to be busy with”.

BJP candidate SP Baghel said he is aware of the issues. But the priority now was to push for victory in the elections and for that he has listed job creation and a corruption-free regime.

His principal rival Akshay Yadav of the Samajwadi Party too, has not flagged the issue with the factories even as he has highlighted the achievements of the state government. On Tuesday, Uttar Pradesh Chief Minister Akhilesh Yadav, a cousin of the Samajwadi Party candidate, addressed a large gathering plumb between the two towns of Firozabad and Shikohabad but the topics were on communal harmony and overall development.

The petroleum ministry has allocated 1.1 mmscmd of gas to Gail Gas for supply to the various existing industries in the Taj Trapezium Zone of which Firozabad forms a part. From 2012, the company has also moved to a system of uniform price mechanism that has replaced the different prices charged under domestic gas, re-gasified liquified natural gas and other categories.

Even as for the owners the mounting labour costs in the units and the prospect of a rise in price of natural gas are continued…

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