A fuel supply disruption linked to rising tensions in West Asia has begun affecting India’s largest ceramic manufacturing hub in Morbi, Gujarat.
When propane stocks ran out at Bluezone Vitrified Pvt Ltd on Friday, one of its units fell silent, forcing the Morbi-based ceramic manufacturer to send home nearly 200 contract workers.
Bluezone is not alone. Industry estimates suggest more than 100 propane-fired ceramic units in Morbi have already shut down, as fuel supplies dry up amid global disruptions linked to escalating US-Iran tensions and shipping risks in the Strait of Hormuz, a key energy corridor.
“At least 100 units have shut down since Thursday because of the current crisis. Each unit employs around 300–400 workers,” Manoj Arvadiya, president of the Morbi Ceramic Association’s vitrified tiles division, told the businessline. “Those who still have gas stocks are continuing operations, others are shutting down. There is no clear message from the companies selling propane in Morbi and we have no idea what their plans are,” he added.
Workers face uncertainty
Morbi’s ceramic cluster—among the largest tile manufacturing hubs globally—employs more than five lakh workers, many of them migrant labourers dependent on daily wages. For these workers, even temporary shutdowns quickly translate into lost income. Arvadiya, who also heads Bluezone Vitrified, said the crisis had already affected his own operations. “I have three ceramic units. Two of them which are using natural gas from Gujarat Gas are currently functional, but the third unit running on propane has shut down. About 50% of the contract workforce attached to that unit has been asked to leave for now,” he said.
Stocks running low
Other manufacturers are bracing for similar shutdowns as remaining propane stocks run out. “I have two units and both operate on propane gas. We have enough stocks to last us for the next two days, after which we will be forced to shut down,” said Morbi-based ceramic manufacturer Nilesh Jetpariya, who employs around 300 workers.
Maintenance mode likely
Initially, the units may move into maintenance mode to avoid immediate layoffs. “We will go for a maintenance shutdown so that some workers can continue to get work. Beyond that, it depends on when propane stocks are replenished,” Jetpariya said. Of the 900-odd ceramic units in the cluster, 70 percent of Morbi’s ceramic units operate on propane, making the cluster heavily dependent on imported fuel. The total fuel consumption in Morbi — in gas equivalent terms — stands at 7 to 7.5 million metric standard cubic metres per day (mmscmd). Of this, roughly one-third is natural gas, and two-thirds is propane.
Crisis may deepen
Industry veterans warn the crisis could deepen if fuel shipments from the Middle East remain disrupted. “According to my estimate close to 200 ceramic units running on propane have already shut till now. If the Strait of Hormuz does not reopen and vessels carrying gas do not reach Indian shores, even units running on natural gas could eventually face shutdowns.” said veteran ceramic manufacturer from Morbi K G Kundariya.
Import dependence exposed
The latest disruption has once again exposed the vulnerabilities of an industry heavily dependent on imported fuels. As a long-term solution, Kundariya suggested that the state government consider revoking the earlier National Green Tribunal (NGT) judgment that had allowed ceramic units to set up coal gasification plants, which could reduce reliance on imports and shield the sector from global supply shocks.
Gas curbs tighten
On Wednesday, Gujarat Gas, the largest supplier of piped natural gas (PNG) to Morbi, said the US–Iran conflict has severely constrained the availability of R-LNG (regasified liquefied natural gas). The company has issued force majeure notices to industrial customers, including those in Morbi, effective March 6, 2026, restricting supplies under existing Gas Supply Agreements. Explaining the impact of the move, Kundariya said, “For instance, if a manufacturer used two lakh cubic metres of gas in February, he will now receive only one lakh cubic metres. This will suffice for roughly half the month, forcing shutdowns after March 15.”
Big firms cushion impact
Some of the larger companies, however, are managing to cushion the impact. In a regulatory filing yesterday, Cera Sanitaryware Ltd on Thursday stated that Sabarmati Gas Ltd has provisionally restricted its supply to 50% of the Daily Contracted Quantity from March 6, 2026, until further notice. The company added that it also has alternative gas arrangements with GAIL (India) Ltd and that, with adequate inventory on hand, production and dispatches are continuing as usual. The filing noted that at present, the supply restriction is not expected to materially affect the company’s business operations, highlighting the role of contingency planning in navigating the current fuel crunch.
Published on March 6, 2026