Coimbatore MSME Crisis Deepens as LPG Shortage Forces 30% Shutdowns
Coimbatore's industrial landscape is facing a severe crisis, with nearly 30% of micro, small, and medium enterprises (MSMEs) shutting down due to an acute shortage of LPG. The Coimbatore District Small Industries Association (Codissia) has urgently appealed to the central government for intervention to protect the livelihoods of approximately four lakh workers.
Urgent Letter to Prime Minister Modi Highlights Critical Situation
In a direct communication to Prime Minister Narendra Modi, Codissia detailed the gravity of the situation. The district is home to about 2.5 lakh MSMEs, many of which rely heavily on LPG for their daily operations. These industries utilize commercial cylinders in various sizes, including 19 kg, 33 kg, 47.5 kg, and 425 kg cylinders.
The scale of consumption is substantial, with the district using around 1.2 lakh 19 kg cylinders every month. This breaks down into:
- 60,000 cylinders for fabrication, laser cutting, powder coating, and textile processing
- 45,000 cylinders for foundry and aluminium manufacturing units
- 15,000 cylinders for food processing industries
Supply Halt Triggers Operational Collapse
The crisis began on March 9 when three major public sector oil companies—Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOCL), and Hindustan Petroleum Corporation Limited (HPCL)—abruptly halted the supply of commercial cylinders. This disruption has created a severe operational crisis across the industrial sector.
Codissia President M. Karthikeyan confirmed that the supply disruption has already forced nearly 30% of industries to cease operations. He warned that more closures are imminent if the LPG supply is not restored promptly. The association has specifically requested the Centre to allocate LPG on a rationed basis to sustain remaining operations and prevent further job losses.
Temporary Respite but Looming Threat to Employment
Industry sources have noted a temporary easing of concerns regarding large-scale job losses, as migrant workers who traveled to their native places for the Holi festival have not yet been asked to return to Coimbatore. However, this provides only brief relief.
Experts caution that if the LPG shortage continues unresolved, the situation could deteriorate significantly in the coming weeks. Both production capabilities and employment stability face serious threats, potentially affecting the broader economic ecosystem of the region.
Compounding Challenges: Rising Input Costs Add Pressure
Beyond the LPG crisis, MSMEs in Coimbatore are grappling with escalating input costs that further strain their operations:
- Steel prices have increased by 15% to 25% over the past four months
- Domestic prices of aluminium and copper have surged by nearly 20%
- Prices of plastics, polymers, and chemicals have risen by approximately 25%
In response to these challenges, Codissia has proposed several measures to the government:
- Abolition of import duty on essential raw materials
- Implementation of a ban on steel exports to stabilize domestic supply
- Fixing of Maximum Retail Price (MRP) for critical raw materials
- Formation of a monitoring committee to ensure transparency and prevent hoarding practices
The combined impact of the LPG shortage and rising input costs creates a perfect storm for Coimbatore's MSME sector, threatening not only individual businesses but the economic stability of the entire region. The coming weeks will be crucial as industry stakeholders await government action to address these pressing challenges.
