Morbi Ceramic Industry Shifts to Propane as Gujarat Gas Price Hike Squeezes Margins
Key Takeaways
- •Morbi's ceramic industry is shifting from natural gas to propane after Gujarat Gas raised prices.
- •Morbi is one of India's largest ceramic manufacturing clusters, where fuel is a major input cost for tile producers.
- •Morbi Ceramic Association Vice President Shailesh Vasnani expects industry growth of 3-5% in FY27.
- •Slower growth is attributed to elevated fuel costs, weak demand, higher freight rates, and sustained margin pressure.
The ceramic industry in Morbi, Gujarat, is shifting toward propane as its fuel of choice after a price hike by Gujarat Gas put pressure on producers' margins.
Morbi is one of India's largest ceramic manufacturing clusters, and fuel is a major input cost for tile producers, making energy pricing a key determinant of profitability in the sector. Natural gas supplied by Gujarat Gas is widely used in the cluster's kilns, so switching to propane represents an effort by manufacturers to contain costs at a time when other expenses, including freight, are also rising.
Shailesh Vasnani, Vice President of the Morbi Ceramic Association, said he expects industry growth in the 2026-27 financial year (FY27) to slow to 3-5%, citing elevated fuel costs, weak demand, and higher freight rates, while margins remain under pressure.
Source: CNBC-TV18
