Shortage Of Commercial LPG Hits MSMEs

Vijayawada: The shortage in commercial LPG supply to the micro, small and medium enterprises (MSME) is having a major impact on production. The supply is down by 40%, leading to cost escalation and the imminent layoff of workers in both Andhra Pradesh and Telangana.

AP has food processing, pharma, agri-based units and ceramics under MSME sector while Telangana has fabrication, plastics, packaging, automobile, energy, defence, aerospace and others in the MSME sector.

Under the influence of ongoing US-Iran conflict, the oil marketing companies have reduced supply of commercial LPG and this resulted in a major impact on the functioning of several units. Some units that signed an MoU to supply raw material and other components are unable to honour them due to a major negative impact on production.

In addition, a cost escalation is also being witnessed.

MSMEs say that they have suffered a 40 per cent impact on the production in the last two weeks' disruption in the commercial LPG supply and if the same continues for some more time, they may face a serious crisis.

They urged the central and state governments to constitute a task force with all the stakeholders like RBI, state level bankers committee, bankers, industries department and others to work out a solution on how to overcome the ongoing crisis in the MSME sector.

They called for slashing the relevant taxes, reduction in power tariff, release of incentives announced both governments earlier to the existing units and cautioned that if no support is extended to them, they may fall into non-performing assets to the bankers.

The MSMEs appeal for a hike in the rate of their supplies to help them overcome the losses.

Federation of small and medium enterprises national president APK Reddy said, “The MSME sector is facing a severe crisis by suffering a dip in production and cost escalation and unless the central government and the state governments come to their rescue, it will result in job loss and closure of units.”