Energy costs for Maharashtra’s manufacturing and chemical units have risen 10-25 per cent, with diesel futures having turned volatile
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PTI
In a notice to industrial consumers, MNGL stated that the ongoing war in West Asia has created security risks for vessels transiting the Strait of Hormuz – a critical maritime chokepoint for LNG shipments to India. “As a result of the prevailing security situation and material risk posed to navigation, vessels are unable to safely transit through the Strait of Hormuz,” the company said. It added that these conditions may constrain its ability to maintain assured gas supplies under existing agreements and cautioned customers against overdrawal.
The disruptions threaten India’s heavy reliance on Gulf LNG imports routed through the strait, amplifying energy stress across Maharashtra’s factories and businesses.
This is forcing some commercial users to look at domestic cylinders via informal channels, sparking safety and black-market worries. Chief Minister Devendra Fadnavis has urged against panic buying, affirming ample LPG supply for residential, petrol and diesel stocks.
Energy costs for Maharashtra’s manufacturing and chemical units have risen 10-25 per cent, with diesel futures having turned volatile. Industry bodies said, “We are seeking urgent stabilising steps.”
Major automobile manufacturers with bases in Maharashtra — Mahindra & Mahindra, Tata Motors, Hyundai Motor India, and Piaggio Vehicles are monitoring the situation. The Pune-Chakan-Talegaon corridor hosts vehicle plants and hundreds of component suppliers reliant on industrial gases for welding and fabrication.
“While large OEMs hold limited buffers, prolonged shortages could cascade from tiered suppliers to assembly lines, elevating per-vehicle costs,” said a senior official of a Chakan-based industry association.
MSME auto supply chain under strain
Small and medium units are most impacted across Maharashtra’s manufacturing hubs, including the Pune-Chakan-Talegaon belt and Baramati, which are running on “hand-to-mouth” fuel buffers, as described by industry insiders.
Many small and medium factories hold only two to four days of reserves, heightening fears of production slowdown. The larger ones, which have deep storage for LNG and other industrial gases, are currently on notice from private suppliers of gas like Linde, said other sources.
Sources have highlighted risks in the fabrication sector. “In Pune’s fabrication industry, acetylene and argon gases are widely used. If manufacturers cannot replenish stocks within normal lead times, vendors supplying to automobile manufacturers will also be affected.”
The crunch may hit the automobile supply chain. It is particularly threatening to small and medium enterprises (MSMEs) that supply components to original equipment manufacturers (OEMs).
Alsundkar noted these units will feel the impact quickly, potentially leading to manpower cuts and higher component costs which they will not be able to pass on to the OEMs due to fixed rates.
“If the crisis continues, such units may have no choice but to shut down till supply stabilises. companies like Bajaj, Mahindra, Tata Motors, Force Motors, and Piaggio that are heavily dependent on the local components ecosystem, may be heavily impacted,” he added.
Alternatives
Hyundai Motor India’s manufacturing facility near Pune, originally developed by General Motors, was earlier configured to operate on piped natural gas, but has since been retrofitted to run on LNG-based fuel systemsto suit Hyundai’s production requirements.
Like most large industrial plants, the facility maintains an on-site LNG storage reserve, which can help cushion short-term supply disruptions.
However, the MNGL force majeure notice has raised broader concerns across the automotive ecosystem, particularly among component suppliers and fabrication units that depend on steady gas supplies for manufacturing processes.
Hyundai Motor India declined to comment on the matter. Other automobile manufacturers with facilities in Maharashtra, including Piaggio Vehicles and Mahindra & Mahindra, were unable to respond to queries at the time of publication.
Industry executives say that if disruptions persist for several weeks, even companies with LNG reserves may begin to feel pressure as replenishment becomes uncertain.
Senior government officials in the food and civil supplies department at Mantralaya said, “A recent review committee of executive directors from IOC, BPCL, and HPCL will assess gas allocation pleas from industries, hospitality, and hospitals on a case-by-case basis.”
“We have informed the refineries to maximise LPG by diverting propane and butane from petrochemicals, prioritising imports for hospitals and schools,” he further informed, stating that the State government has strictly instructed oil marketing companies to prioritise consumers over industry needs.
Industry bodies warn that nearly half of the hotels and restaurants in cities like Mumbai could face temporaryshutdowns if supply chains do not stabilise soon. The crisis has also begun affecting civic infrastructure. Pune’s Vaikunth Dham crematorium, the largest in the State, has temporarily suspended gas-based cremations due to shortages and has switched to electric furnaces and traditional wood pyres.
Published on March 10, 2026