LPG supply disruption in Punjab: Why Ludhiana factories fall silent amid growing West Asia energy crisis

“We have not received any commercial LPG jumbo cylinders since March 10,” said K K Garg, owner of KNL Driveline Parts and Sharu Steels and president of the Induction Furnace Association of North India. “The administration says there is only a 20 per cent cut in commercial supplies, but on the ground, we are getting nothing. Our units depend on daily supplies because storing LPG in large quantities is a safety risk. As a result, workers are sitting idle, and production has come to a complete halt,” Garg said.

Garg said the situation has been further complicated by the collapse of the LPG booking system. “We are being told domestic cylinders are being prioritised, but even the online booking system is not responding. Dealers say the server is down. In a nutshell, neither domestic nor commercial supplies are available due to different reasons,” he said.

Industrialists warn that if the disruption continues, the ripple effects could spread across multiple sectors. According to Garg, thousands of workers depend on such units for their livelihood. “If industries shut down, workers sit idle. And if workers have no income, how will their households run? The government is focusing on domestic supply, but homes also run on the wages earned from industry. Regulate supplies if needed, but at least provide enough fuel so that units can operate even one shift,” he said.

At Renny Strips Limited, owner Dev Gupta said LPG is required for welding during the fabrication of scaffolding structures. Without that step, the product cannot be completed or delivered. “If LPG is not available, the scaffolding cannot be finished, and orders cannot go out. Production simply stops midway,” said Gupta, who is also general secretary of the Induction Furnace Association of North India.

Punjab’s manufacturing ecosystem in dire straits

Industry representatives say the dependence on LPG runs deep across Punjab’s manufacturing ecosystem. Forging units, cycle parts manufacturers, fabrication units, hammer units, furnace-based industries, and automotive component manufacturers all use LPG in one or another stage of production. Even the manufacturing of basic fasteners such as nuts and bolts depends on LPG-based heat treatment.

Explaining the process, Garg said once nuts and bolts are formed, they must undergo heat treatment to gain strength and durability. LPG-fired furnaces heat the fasteners to temperatures of around 800–900°C for hardening before they are quenched and tempered. “This is one of the largest LPG-consuming stages in fastener manufacturing. Without LPG, the process stops, and the final product cannot be completed,” he said.

Over the past decade, many industries across Punjab shifted from coal-fired furnaces to LPG furnaces to comply with environmental regulations and reduce pollution. Such LPG-dependent units are spread across industrial hubs, including Ludhiana, Jalandhar, Mohali, Rajpura, and Malerkotla.

Transition to piped natural gas

In the steel hub of Mandi Gobindgarh, which has more than 150 steel rolling units, most factories have transitioned to piped natural gas (PNG). However, industry sources say PNG supply too has been coming with cuts, forcing several units to reduce their production levels significantly. District Food and Civil Supplies Controller office of Fatehgarh Sahib, under which Mandi Gobindgarh comes, says, “PNG supplies come directly under the Ministry of Petroleum, and Gas Authority of India Limited (GAIL) supplies PNG to industry. Based on the past six months’ consumption, the average will be calculated, and 80 per cent of that average will be given to the units. Hence, these cuts are made by the Union Government based on the global crisis. As of now, we are focusing only on domestic supplies.”

Fertiliser units advance annual maintenance shutdown

Sources in the energy sector also indicated that supplies of liquid natural gas (LNG), used by fertiliser manufacturing plants, have reportedly declined. As a result, some fertiliser units have advanced their annual maintenance shutdown by nearly a month. If the disruption persists, experts warn it could eventually affect fertiliser availability — a development that would directly impact the agricultural sector.

Meanwhile, industrialists say they have been uploading their daily LPG requirements on a portal set up by the Central Government and writing to deputy commissioners in districts where their units are located. They have urged both the state and central governments to intervene quickly and regulate supplies so that industrial activity can resume.

A shift to electric furnaces on the cards

The crisis has also forced some manufacturers to rethink their long-term fuel strategy. Garg said several units are now considering shifting to electric furnaces in the future. “But that cannot happen overnight. Still, this situation has certainly taught us a lesson for the future,” he said.

Responding to the issue, Poonam Singh, Additional Deputy Commissioner (General), Ludhiana, said the situation appears to be driven by sudden demand rather than a breakdown in the supply chain. “It is a demand-driven issue, not a supply chain issue. We expect to resolve it soon,” she said.