Punjab gas industry rues high power cost

Gas manufacturers in Punjab are unhappy about the high cost of power, which is rendering them uncompetitive in the region.

R S Sachdeva, president of the Punjab Industrial Gases Manufacturers Association (PIGMA), said since electricity was a major input cost for gas manufacturers, the high electricity tariff posed a big challenge for them.

Sachdeva added that with power tariffs higher in Punjab compared to neighbouring states, Punjab’s gas manufacturers had been forced to become traders in gases. In neigbouring states like Himachal, Uttarakhand and Haryana the power is still cheaper compared to Punjab.

Punjab has over 20 manufacturers of industrial and medical gases like oxygen, nitrogen and argon.

 

Earlier, what was hurting gas manufacturers the most was the quality of power, but now it is the price which is hurting the most, Sachdeva added. Electricity duty in Punjab has been hiked this year from 10 per cent to 13 per cent, making it the second most expensive state as far as power is concerned.

“Power accounts for 70 per cent of the cost of manufacturing one cubic metre of oxygen. So, any hike in the power tariff makes life difficult for the gas industry,” he said.

Electricity duty and octroi charges are levied over and above the basic power rates. The industry produces medical oxygen, which is used in hospital as a life saving drug.

The gas units’ production system has been disturbed by existing peak-hour load restrictions and if these restrictions are increased, it will force these units to close down, said Sachdeva. “The closure of these units would create scarcity of medical oxygen, apart from forcing the owners to switch over to trading to meet out their statutory expenses,” he added.

Sachdeva demanded that in order to protect gas industry from further trouble, electricity duty should be made “VATable”.