West Asia crisis has affected operations; need clarity on LPG, propane allocation percentage, assured supply: Jindal Stainless

Stainless steel major Jindal Stainless Ltd. today said the crisis in West Asia will have an impact on the company’s operations due to heavy dependence on industrial gases such as propane, LPG and natural gas.

The company said the plants are running at rationalised capacity and urged the government to provide clarity on allocation percentage for industrial propane, LPG and natural gas so that the companies in the sector could accordingly optimise operations.

 “Due to the heavy dependence of stainless steel manufacturing on industrial gases such as propane/ LPG and natural gas, several processes across our plants have been adversely impacted. Unlike conventional steel industry, which largely utilises blast furnace and coke oven gases as energy sources, the stainless steel industry follows the scrap-based production route where such gases are not generated internally. Given the constraints in fuel availability, our plants are operating at a rationalised capacity,” said Abhyuday Jindal, MD, Jindal Stainless.

Clarity from the government on allocation percentage of industrial gases  

 “We appreciate that the government is fully seized of the matter and is actively prioritising fuel allocation for critical sectors,” Jindal added seeking clarity from the government on the allocation percentage of the industrial gases.  

“Clarity on the allocation percentage for industrial propane/LPG and natural gas, along with assurance of regular supplies, will be important for the stainless steel industry to plan and optimise operations. In the absence of such clarity, we foresee a cascading effect across the industry, the severity of which will depend on how quickly these issues are resolved," Jindal added.

He also said disruptions in global shipping routes are also resulting in vessel diversions, longer transit times, and cargo delays, which are also placing additional pressure on supply chains and margins.

It may be noted that the government has decided to allocate 20% of the average monthly commercial LPG requirement to hotels and restaurants, offering relief to the hospitality sector as supply disruptions triggered by the West Asia conflict begin to affect businesses across the country.

The Hotel Association of India (HAI) welcomed the move, saying it should help stabilise operations in the sector, which has been grappling with uncertainty over cooking gas availability.