Morbi’s ceramic industry is once again facing pressure from rising energy costs, with manufacturers increasingly turning to propane after Gujarat Gas raised prices for industrial customers. 

The latest price increase has made piped natural gas less competitive for ceramic units, forcing manufacturers to look for cheaper fuel options to protect their already-thin margins.

Gujarat Gas has increased the price of gas supplied to the Morbi cluster by Rs 2.65 per standard cubic metre to Rs 46.05 from Rs 43.40, according to industry reports. The increase comes at a sensitive time for manufacturers, as fuel remains one of the highest costs in ceramic tile production.

Propane has emerged as an alternative because of its relatively better cost economics. A large part of Morbi’s ceramic industry had already shifted towards propane during the gas supply disruptions caused by the West Asia conflict earlier this year. Before the crisis, the industry used a mix of propane and piped natural gas, with propane also offering a higher calorific value.

The situation has been particularly challenging for Morbi because gas accounts for a significant share of production costs. Industry estimates put the contribution at around 40% of the total cost of making ceramic tiles. The cluster also depends heavily on imported fuel, leaving manufacturers exposed to global energy prices and disruptions in shipping routes.

The impact has extended beyond domestic production. Morbi is one of India’s largest ceramic manufacturing hubs and accounts for nearly 90% of the country’s ceramic production. However, exports fell sharply during the April-June 2026 quarter as higher gas prices, supply disruptions, container shortages and steep freight costs hit the industry. Exports were estimated at around Rs 1,700 crore during the quarter, compared with nearly Rs 5,200 crore a year earlier.

For Gujarat Gas, the shift towards propane remains a key challenge because lower industrial PNG volumes can affect sales in the important Morbi cluster. The company has previously reduced prices and worked with manufacturers to regain volumes, while also looking at alternative fuel solutions and longer-term gas sourcing.

The latest price hike shows that fuel costs remain a major concern for Morbi’s ceramic manufacturers. Unless gas prices become more competitive, the industry may continue to favour propane and other alternatives to keep production costs under control.

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