“Gujarat Gas is 25% higher than the propane as on date today,” he said. Propane’s share of Morbi’s gas sourcing mix is expected to rise to around 80% in September, from 60% in July, while Gujarat Gas’ share is likely to fall to about 20% from 40%.
The price of Gujarat Gas for industrial customers rose 14% between July and August, from ₹79 to ₹90 per standard cubic metre, including value-added tax (VAT). Vasnani said fuel costs have risen 60-70% over the past four months.
More than 700 ceramic tile and sanitaryware factories in Morbi are affected by the price increase. Vasnani said the September shift in sourcing was implemented from the beginning of the month, with the industry moving towards propane because of the price difference.
Looking ahead, Vasnani expects FY27 to be tougher than 2025-26 (FY26) due to supply pressure through the Strait of Hormuz and the broader West Asia conflict. If conditions do not improve, industry growth could slow to 3-5% from the usual 8-12%. However, he does not expect an outright decline in sales.
The industry has already passed higher costs on to customers, but manufacturers are still absorbing part of the increase. “We already have passed our prices to the customers, but you see, the customers are still waiting to get down the price to the normal level.” Vasnani said this has resulted in a 3-5% reduction in margins.
Domestic demand has fallen 10-12%, while export demand has declined more sharply. Vasnani attributed part of the export slowdown to higher container freight costs, which have more than doubled to $3,500 per container from $1,500-1,700 on routes to Europe, Russia, Latin America and the Middle East.
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Exports account for around 30% of Morbi’s ₹65,000 crore industry, while the remaining 70% is sold domestically, according to Vasnani.
On raw material availability, Vasnani said supply caps introduced in April and May have been lifted. However, he warned that continued disruption from the West Asia conflict and the Strait of Hormuz could put further pressure on the industry, particularly because of its dependence on fuel imports. He added that installed capacity is running at full utilisation wherever market demand allows.
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