Rising fuel prices erode margins, disrupt orders for industrial units in city

Ludhiana: The global energy shock stemming from the West Asia conflict is tightening its grip on Ludhiana's industry, as escalating fuel prices and shortages begin to disrupt manufacturing activity and strain MSMEs. Industrial units across Ludhiana are facing increasing stress as rising prices of petroleum-based industrial fuels continue to push up cost of production. Industrialists warn that the ongoing surge in fuel prices is severely affecting manufacturing activity and could disrupt supply chains across multiple sectors. They say margins are being wiped out and fresh orders are becoming harder to secure as clients refuse to bear additional costs.Pankaj Sharma, president of the Association of Trade & Industrial Undertakings (ATIU), expressed serious concern over the sudden escalation in prices of fuels such as light diesel oil (LDO) and furnace oil. He said industries are struggling to absorb the sharp rise in input costs, occurring alongside an increase in raw-material prices. Sharma added that sectors like the forging industry, which depend heavily on these fuels, are finding it extremely difficult to continue production at current cost levels.According to Sharma, lack of LPG availability combined with rising prices of other fuels has made operations unsustainable for many units. He said dispatch of existing orders has become challenging and new orders are being refused because of higher production costs. He observed that margins on previously booked orders have vanished due to increased input costs, and customers are unwilling to accept revised prices, leading to a pause in future orders.Industrialists also fear that if the situation persists, supply chains of tractor parts, agricultural equipment, bicycle components and auto parts may face disruptions. Rajesh Mittal, another industrialist, said furnace oil prices were around Rs 51,000 per tonne when the crisis began about three weeks ago, but have now risen to Rs 71,000 per tonne, with indications that prices may increase further. He said unavailability of LPG is already bringing many industries to a halt, and rising cost of other fuels is adding to the disruption.Mittal said the situation is particularly difficult for MSMEs, which operate on thin profit margins and may not be able to withstand prolonged cost fluctuations. He emphasised that these units do not have the financial capacity to absorb the additional burden caused by continuous price hikes in fuel.Sanjeev Gupta, another industrialist from the casting sector, said delivery of metallurgical coke is also falling short and often unavailable. He stated that the rise in petcoke prices is likely to push up coke prices as well, which would affect induction moulds and various types of castings already struggling with rising costs.Sharma urged the govt to step in immediately to stabilise fuel prices and offer relief to the MSME sector. He said timely intervention is crucial to ensure continuity of industrial operations and protect employment across Ludhiana's industrial landscape.