The shutdown, which began on March 17, was triggered by a fuel supply crisis amid the war in Iran. Most of Morbi’s tile-making units run on propane-LPG, all of which is imported from the Persian Gulf. The blockade of the Strait of Hormuz has disrupted this supply, pushing tile makers to seek piped natural gas (PNG) as an alternative. It is the new PNG prices quoted to these “returning” users that have now deepened the crisis.
To be sure, the industry is bearing the brunt of the global energy shock — when The Indian Express visited Morbi on March 19, most tile units had shut down because their propane-LPG stocks were depleted. Skeleton crews were carrying out maintenance work; the rest of the workers had been told there was no work for them, at least till April 15. These workers — mostly migrants from Bihar, Uttar Pradesh, Madhya Pradesh, Jharkhand and Odisha – were heading home, catching long-distance trains from Morbi, from Rajkot 66 km to the south, or from Ahmedabad 200 km to the east. More than four lakh workers are employed in the ceramics cluster, with another couple of lakh in allied industries. Paid roughly Rs 15,000-18,000 a month through job contractors who brought them to Gujarat, several said they were still owed months of back pay. Sanitaryware workers were spared this disruption. Their units, which run on PNG rather than propane-LPG, remained fully operational. But sanitaryware which runs more by manual labourers than the tile units which are largely mechanised, accounts for only 17% of factories in the Morbi cluster, while the other 83% make wall, floor and vitrified tiles.
Different gas prices, same industry, and some discontent
In a letter to industrial customers in Gujarat and the Union Territory of Dadra & Nagar Haveli on April 1, Gujarat Gas Limited quoted a price of Rs 23 per cubic metre higher for propane users switching to PNG than for its regular PNG customers. For returning users, this works out to Rs 88 per cubic metre plus 6% GST — nearly twice what they were paying for propane-LPG.
“When we shut down the units, we were paying Rs 52 per cubic metre for propane-LPG. Now, they are asking us to pay Rs 93 for PNG, including GST, which is disproportionate to what regular users pay. We cannot operate at these rates,” said a tile unit owner.
ExplainedWhy Morbi matters
Morbi accounts for 90% of India's Rs 75,000-crore ceramic industry. Of the roughly 800 units in the cluster — 650 major and 150 minor — around 500 are tile makers running on propane-LPG, consuming about 55 lakh cubic metres per day.
For regular PNG users, the April 2026 prices are tiered based on consumption over the six months from September 2025.
Morbi accounts for 90% of India’s Rs 75,000-crore ceramic industry. Of the roughly 800 units in the cluster — 650 major and 150 minor — around 500 are tile makers running on propane-LPG, consuming about 55 lakh cubic metres per day. The remaining 150-odd sanitaryware units use PNG, consuming about 25 lakh cubic metres per day. The new pricing stems from a central government notification of March 9, which set a unit’s Daily Contract Quantity (DCQ) at 80% of its average consumption over the previous six months. Since tile makers had little or no PNG usage in that period — having switched to propane-LPG, which was cheaper — they are now classified as non-regular users and charged the higher rate.
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All units in Morbi have been Gujarat Gas customers since 2007, said Narendra Sanghat, newly elected president of the Wall Tiles Division of the Morbi Ceramics Manufacturers Association (MCMA), which announced the shutdown. Most had kept their pipeline connections active, paying minimum bills, even while running on propane-LPG. “The irony is that the tile units had only moved to propane-LPG because it was cheaper than PNG,” he said.
The pricing gap – 35% higher for returning users – is what the industry says is untenable. “Quoting two different prices to two parts of the same industry disturbs the sector’s balance,” said Manoj Arvadiya, president of the Vitrified Tiles Division of MCMA. “We can’t buy gas at such high prices. So, we’ve decided to extend the shutdown.”
The impact is especially acute for tile makers because of their thin margins and high volumes. Sandip Kundariya, president of the Floor Tiles Division of MCMA, explained: “If a sanitaryware unit has a single product for Rs 3,000, even a Rs 100 price increase can be absorbed. But tile units sell products at Rs 12-15 per foot – a Rs 10 hike is a major increase. Customers expect prices to fall and won’t buy at current rates. And if a customer orders 3,000 boxes and sells only 1,000, they are stuck warehousing the rest at a loss.”
Sanitaryware units are relatively better placed. Unlike tile makers, they have always run on PNG, and their consumption is lower. But even sanitaryware units are feeling the strain. Raw material costs have risen sharply, and petroleum-based inputs like sheet covers and packaging have also become more expensive.
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Calls and texts to Sandeep Dave, general manager for Secretarial & Legal, Corporate Communication and CSR at Gujarat Gas, went unanswered.
The industry is now calling for government intervention.
