Jalandhar units face heat of surging furnace oil prices

Aakanksha N Bhardwaj
Tribune News Service
Jalandhar, October 19

Skyrocketing fuel prices have not only derailed the budget of automobile owners, but also made small-scale industrial units suffer as a 50 per cent jump in furnace oil prices threatens to jeopardise Jalandhar-based hand tools, pipe fittings, nut-bolts and auto-part manufacturers.

Furnace oil, which is used for casting, moulding, annealing and forging, has seen a Rs 15 per kilogram jump. The petroleum product, which was being sold around Rs 30 per kg in April this year, is now available at Rs 45 per kg, local manufacturers said.

Manufacturers are worried as the price of furnace oil is on a continuous rise in the past six months and seeing the global trend, they do not expect any immediate respite. While global crude oil prices are on the rise due to geo-political reasons, Indian consumers are finding petroleum products costlier because of a sharp depreciation of the rupee against the dollar. India imports almost 85 per cent of crude oil it processes and pays in dollars.

The Jalandhar-based manufacturers cannot shift to the other cheaper alternatives such as natural gas due to its unavailability. The high fuel price has also escalated their input costs. For instance, pig iron, which was priced at Rs 24 per kg in April this year, is now sold at Rs 32 per kg, more than a 33 per cent jump.                       

The rising fuel cost has a spiraling effect and the production cost has risen significantly, Jalandhar Chamber of Industries General Secretary Charanjeet Singh Maingi said.

There have been increases in the prices of other raw materials, including steel and iron, adding to the input costs, he said. “The problem is that the industry is dying. The government is doing nothing for the micro, small and medium enterprises (MSMEs), which is the major sector for employment generation. MSMEs are ending fast,” he added.

“There is no gas pipeline laid in the city. We have given the requirement to the officials concerned that a gas pipeline is needed here, but no distribution is being done. If the pipeline gets laid, the problem will get solved,” Maingi said.

 Om Prakash, a hand-tool industrialist, said he had never seen such a slump in the industry. He has been running the business in the city since 1986. "With the increase in the rates of petroleum products, there is a jump in transportation cost as well," he said.

The Supreme Court had imposed a ban on the use of pet coke and furnace oil in October last year in the Delhi and NCR region because these fuels cause pollution. The fuels are, however, used by the industries in other states as they do not have access to cleaner fuels such as natural gas.