Page 5 - AsianOil Week 48 2022

AsianOil COMMENTARY AsianOil

Ceramic makers in
India have switched to
coal for their energy.

the director of CRISIL Ratings commented. told Financial Express. Over the past year and
“City gas distributors have been taking succes- a half, the price of pipeline gas has increased
sive price hikes since April 2021 to manage their from INR35 to INR63 per cubic metre, before
cost pressures. For instance, CNG prices have recently being cut by INR5.
been increased by a massive 75%. The hike in The Mobi ceramic cluster amounts to more
the CNG price has reduced the cost advantage than three quarters of Indian ceramic produc-
that the fuel enjoyed compared with gasoline tion, creating annual turnover of more than
and diesel, impacting the number of CNG vehi- INR450bn ($5.5bn), including INR120bn
cles sold in the country.” worth of exports.
Meanwhile, the market for CNG vehicles in The Indian fertiliser system has also got hit
India has taken a clear hit. According to a report hard. The government is expanding the sub-
published by Economic Times on September sidy bill by around INR400bn this fiscal year,
30, the Indian automobile industry has slashed bringing the total to INR2.15 trillion. The price
the estimate of the number of CNG vehicles that of domestic gas and imported LNG increased
will be sold in the year ending March 2023 by from an average $22 per mmBtu as of June to
25-30% to 500,000-550,000. This is still higher around $25 per mmBtu in September this year.
than the forecast for the 2022 financial year, “Amid the Russia-Ukraine conflict, the price
though, of 261,000 units. of pooled gas has risen approximately 10%
The Indian manufacturing sector has also quarter on quarter in September 2022. The ear-
taken a big hit. The Financial Express ran a lier expectation was prices would soften gradu-
report in early November estimating that more ally. Each dollar’s increase in the price of pooled
than 300 of the 800 units in India’s biggest gas raises the government’s subsidy burden by
ceramic production hub, Morbi, in the state INR70bn on domestically produced urea, which
of Gujarat, had had to switch from gas to more accounts for 85% of the production volume,”
affordable propane. The gas demand to the hub CRISIL said. “The price of imported urea, which
was reduced to 2mn cubic metres per day, versus accounts for the balance 15% volume, remains
an average of 7 mcm per day last year. elevated at over about $650 per tonne, almost
Propane has become cheaper by INR15 per double the historical levels. Together, this could
unit compared with natural gas, Haresh Bopal- mean overall subsidies rising to INR2.55 trillion
iya, president of Morbi Ceramic Association, this fiscal.” ™

Week 48 05•December•2022 www. NEWSBASE .com P5