Fuel Supply Challenges Impact Indian Exports

FIEO Urges Government to Prioritize LPG and Natural Gas Supply for Export-Oriented Units​

New Delhi, March 12: The Federation of Indian Export Organisations (FIEO) has urged the government to prioritize the allocation of LPG and natural gas to export-oriented manufacturing units, warning that disruptions in fuel supply could impact production schedules and export commitments.

FIEO President S C Ralhan said he has written to the commerce and industry ministry highlighting the concerns of manufacturing exporters facing difficulties due to fuel supply uncertainties.

Exporters Seek Dedicated Fuel Allocation​

Ralhan emphasized the need for a prioritized allocation mechanism for LPG and natural gas as industrial fuel for export-oriented units (EOUs) and export-focused small and medium enterprises.

“Manufacturing exporters are facing difficulties. There is an urgent need for prioritized allocation of LPG and natural gas as fuel for export-oriented units and export-oriented SMEs,” he said.

The request comes at a time when the government has revised the priority order for allocating domestically produced natural gas. Under the revised system, LPG production has been placed alongside compressed natural gas and piped cooking gas at the top of the allocation list.

West Asia Crisis Disrupts Energy Supplies​

The appeal from exporters follows disruptions in energy supplies in several countries due to the West Asia crisis triggered by the joint attack by the United States and Israel on Iran.

According to FIEO, the changing energy landscape is creating challenges for industries that rely heavily on LPG and natural gas as fuel for manufacturing processes.

Global Competition Raises Concerns​

Ralhan noted that export-oriented manufacturing units operate in a highly competitive global environment, competing with suppliers from China and other East Asian economies.

Large international buyers follow structured global sourcing strategies and depend on uninterrupted production and timely deliveries from their suppliers.

FIEO said that any disruption in fuel availability can affect production schedules for Indian exporters.

“In the event of disruption in fuel availability, Indian exporters are unable to maintain production schedules. Consequently, international buyers are compelled to shift their orders to competing countries, particularly China,” the organisation said in its communication to the commerce ministry.

Fuel Supply Critical for Export-Oriented SMEs​

FIEO highlighted that LPG and natural gas remain essential industrial fuels, especially for export-oriented SMEs and EOUs that rely on these energy sources for their manufacturing operations.

Ralhan acknowledged that the current gas supply situation is challenging but suggested that a calibrated allocation mechanism could address the issue.

“Even through a calibrated mechanism, a dedicated priority allocation for export-oriented industries would help ensure that production and export commitments are not adversely affected,” he said.

He added that ensuring stable fuel availability would help safeguard existing export orders and strengthen international confidence in India as a reliable sourcing destination.