Diesel based manufacturing units divert to CNG-solar energy

  • Rising petrol-diesel prices have hit industries hard since the Corona epidemic
  • Gujarat tops CNG consumption in automobile industries, companies to use gas-powered boilers instead of diesel
  • More than Rs 5,000 crore will be invested in CNG in the near future

Gujarat’s MSME sector has been hit hard by the ever-rising price of petrol-diesel (fuel) after the Koro epidemic. Companies are not in a position to raise the prices of manufactured products to sustain trade against a burden of more than 15 per cent. Due to high diesel prices, many diesel based boiler manufacturing units in Gujarat are rapidly diverting to CNG and solar energy. Diesel-based units have seen a 60 per cent decline in the last five years as against 45-50 per cent gas consumption diverted. 

Despite subsidies in solar energy, capital costs are still high against which CNG-gas costs are lower. In Gujarat, 60-65% of the units have become gas based. And in the next five years, 90-95 percent of the units will be green energy-gas based. It is estimated that more than Rs 5,000 crore will be invested in gas-based units in the next short period. Gas and green energy will save companies up to 35-40 per cent in costs, said Ajit Shah, president, Sanand GIDC Assoc.

Lack of infrastructure will take decades for battery powered vehicles: As the government is increasingly prioritizing the environment, the BS-6 rule has come into the vehicles. Not only is the government focused on battery powered vehicles but it lacks infrastructure Comparison is the cheapest gas at the moment, which will be in demand, said Kush Patel, director, Rudra Gas Enterprise.

Highlights

  • 80% of the units were running diesel-based boilers five years ago
  • 45% of units diverted from diesel to CNG in five years
  • 44% difference between the price of diesel and CNG
  • 20% fewer units now run diesel-based boilers
  • As diesel became more expensive by 15%, so did the cost of the product
  • In 05 years, Gujarat’s petrol pumps will be 70% CNG based

Gas 44 percent cheaper than petrol

YearPetrolGasThe difference
1-7-1570.754268%
1-7-1666.524355%
1-7-1767.2446.544%
1-7-1874.5746.7560%
1-7-1967.9446.7545%
1-7-2080.4355.9544%

Consumption status in the energy sector

Details20102020
Coal53%50%
Oil30%25%
N.Gas11%20%
Hydro5%2%
Nuclear1%3%

Kashyap Patel, director of Rudra Gas Enterprise, an 80 percent Gujarat gas-based contractor in the country, said Gujarat is the top state in the country in CNG gas. Gujarat contractors account for 80% of the total number of gas-based contractors in the country. Contractors are looking for venture capital investors to expand the business as the demand for gas increases and are trying to boost the business. The gas sector is likely to be in high demand.

State of gas consumption by state: Gujarat at the forefront

  • Gujarat – 53%
  • Maharashtra-52%
  • Rajasthan-26%
  • UP-26%
  • Madhya Pradesh -3%
  • Andhra Pradesh -14%
  • Assam-4%

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