However, the costs of running these kilns now will be significantly higher than when propane/LPG was used as fuel. Some of this price rise will inevitably be passed on to the consumer.
The Indian Express has learnt that tile manufacturers in the ceramic hub of Morbi have agreed to pay this higher premium with a caveat: that the prices of all tile units must be increased to meet the higher production costs. Previously, the industry had extended its shutdown from April 15 to May 1 after Gujarat Gas Ltd (a public sector company) asked them to pay Rs. 93 per cubic metre of PNG against Rs.70 per cubic metre that is charged to regular users, who are mostly in the sanitaryware division.
While some units became operational on Wednesday, sources said at least 270 more ceramic units in Morbi that were previously using propane/LPG, would now buy PNG at the higher rates starting May 1, as their buffer product stocks had run out.
Be it propane or PNG, most of the fuel used by the Morbi ceramics cluster—the world’s second largest—is imported, mostly from the Gulf Cooperation Council (GCC) countries in the Persian Gulf.
Propane, which is the preferred fuel, continues to remain unavailable even as a fragile ceasefire is in place in West Asia and the Strait of Hormuz now remains blockaded by the US, too. Also, the Government of India had ordered in reserve the stock remaining with oil marketing companies for household usage.
25% hike in retail costs
“The retail costs of tiles will increase by at least 25-30% on the back of heightened fuel costs,” confirmed Manoj Arvadiya, the president of Vitrified Tiles Division of Morbi Ceramic Manufacturers Association (MCMA). Arvadiya said the industry would set new rates depending on the categories of tiles made by the wall, vitrified and floor divisions.
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Nilesh Jetpariya, who owns Kera Vitrified and chairs the Panel for Ceramics at the Chemical and Allied Products Export Promotion Council (CAPEXIL), said, “The association has declared a price increase for all tiles depending on the type of product. An average tile costing Rs.22 per foot will now cost Rs.30 as production restarts.”
Notably, there is an increase of Rs.8 per foot on double charged tiles, which have two layers of pigment and used in commercial spaces since the method decreases wear and tear. Meanwhile, there’s a Rs7 per foot hike in glazed vitrified tiles (GVT), which have a wide variety of designs and are meant for residential spaces.
Meanwhile, the sanitaryware division of MCMA has also declared a 15-20% hike for all of its products starting April 15 in view of the escalating fuel costs, its president Ajay Marvadiya confirmed.
While the labour-intensive sanitaryware units, which use lesser fuel to run their kilns, never stopped production, the tiles units, who had sent most of their migrant workers back home have now recalled them with the kilns resuming operation in the coming days.
Cost differential that shut down an industry
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These tiles units, which were paying Rs.52 per cubic metre for propane/LPG before February 28, when the US and Israel went to war with Iran, were asked on April 1 to pay Rs.88 plus 6% GST (Rs.93) for every cubic metre of PNG since their usage of the gas for the previous six months was nil. This calculation was based on a Government of India directive dated March 9.
On the other hand, the 110 sanitaryware factories and 32 tiles units that were regularly using PNG even before the conflict broke were asked to pay Rs 66.00 plus 6% GST or Rs.70 per cubic metre.
This price difference of Rs.23 in PNG offered to “regular” and “prodigal” users meant that of the 650 major and 150 minor ceramic units located in Morbi, only 142 were able to sustain production while it became unfeasible for most of the sector. Notably, the Morbi cluster accounts for 90% of the Rs.75,000 crore Indian Ceramics industry, leading to the impact being felt on the entire country and not just limited to one district in one state.
This price differential by a public sector unit to supply PNG to units in the same industrial sector located in Morbi district of Gujarat, had led to a massive uproar by manufacturers. But the PSU did not budge in spite of representations made by MCMA to the state and Union governments. Requests to decrease the GST on natural gas to 1-2% temporarily instead of the current rate of 6% also wemt unheeded.
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On Tuesday (April 14), leaders of MCMA met Ajay Bhadu (Additional Secretary, Ministry of Commerce and Industry, and CEO of Government E-Marketplace (GeM)). They also met the economic advisor of the Department for Promotion of Industry and International Trade- (DPIIT) at Commerce Bhavan, New Delhi. Members said they made representations about the strain on the ceramic industry and sought relief in fuel prices. They are still hoping that the Government of India would intervene to bring down the prices of PNG.
No relief in May too
Gujarat Gas, in its very first statement on the crisis in the ceramics industry on Tuesday, said, “As of February 2026 (pre-crisis period), 377 ceramics customers were using GGL’s PNG. In comparison, around 415 customers relied on propane supplied by oil marketing companies viz. IOCL, BPCL & HPCL, consuming ~5.6 MMSCMD (natural gas equivalent), meaning nearly 70% of the fuel requirement was met through propane. In early March 2026, GGL’s supply increased compared to February 2026. However, owing to disruptions in the LNG supply chain caused by the US–Iran conflict, GGL adhered to the Government of India’s Gazette Notification and restricted supply to 80% of the average consumption over the previous six months.”
The statement added, “To mitigate the impact and support industrial continuity, GGL engaged with ceramic manufacturers to facilitate additional supply of natural gas to substitute propane demand, despite a sharp rise in global LNG prices. During April 2026, GGL continued supplying gas as per government directives, sourcing additional volumes at prevailing spot market prices from non-Middle East regions. As a result of gradual stabilization efforts undertaken jointly by GGL and Morbi Ceramic Association, 142 ceramic units are operational currently.”
The operative part of the statement, which confirmed no decrease in prices, said, “For May 2026, LNG prices remain elevated at approximately $18–20 per MMBtu, yet GGL remains prepared to supply the required volumes to support further resumption of operations in Morbi.”
Number Crunching
90%: Morbi’s share in Rs 75,000-crore Indian ceramics industry
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Rs 52 per cubic metre: Propane price as of February 28 (before war):
Rs 70 per cubic metre: Cost “regular” users were asked to pay for PNG on April 1
Rs 93 per cubic metre: Cost “prodigal” users were asked to pay for PNG on April 1
55 lakh cubic metre: Per day propane usage by 415 units (before February 28)
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25 lakh cubic metre: Per day natural gas usage by 377 units (before Feb 28)
