The ceramic industry in the state,which accounts for nearly 80 per cent of the total production in the country,has threatened to go back to coal-powered units if the Gujarat government does not take steps to bring down gas price.
At present,these units mainly use natural gas,supplied by the Gujarat State Petroleum Corporation,as fuel. Although coal is a cheaper alternative but it is not an environment-friendly option.
Gujarat Vitrified Tiles Association president Girish Pethapara said: We have reached a point where production price is nearly equal to the sale price. Increase in raw material prices,especially fuel and transportation charges,has left the industry with no profit margin over the last six months.
An immediate effect of the hike is that vitrified tiles manufacturers will increase the price by Rs 2 per foot from Monday.
At present,natural gas is available at Rs 17 per cubic feet,which is very high. The government has no control over petrol and diesel prices,but it can provide natural gas at subsidised rates since its own unit is involved in the distribution work, Pethapara added.
When natural gas was introduced two years ago,it cost Rs 12 per cubic metre. During the recent economic slow down,the price rose to Rs 23 and now it costs Rs 17.
He further said: In the last two years,most ceramic units have opted for natural gas as it was promised to be cheaper than coal and also less polluting. But the way GSPC has been increasing its rate,manufacturers feel cheated.
According to industry leaders,when prices of petrol,diesel and raw materials were not very high,they were in a position to use costlier fuel,but not anymore. We will wait for a while before going back to coal gas, said Pethapara.
The Indian ceramic industry is estimated to be worth Rs 4,000 crore. Morbi-Than in Rajkot district and Kadi in south Gujarat have over 300 units with a collective production (of roof,floor tiles and other sanitary wares) of 10 lakh square metre per day.