Gas Supply Crisis Puts Bengaluru's Peenya Industrial Hub on Brink of Shutdown
The spectre of a complete operational shutdown looms large over Bengaluru's Peenya Industrial Area, one of the largest industrial hubs in India, as disruptions in gas supply threaten to cripple over 3,000 micro, small, and medium enterprises (MSMEs). Industries reliant on LPG for critical processes like welding, heat treatment, metal casting, and food processing have been grappling with irregular supply for the past 10 days, with the situation worsening daily.
Worsening Supply Shortages and Economic Impact
Out of nearly 13,500 industrial units in Peenya, approximately 3,500 are directly dependent on commercial gas. Many report that supply has dropped sharply, forcing production cuts and raising fears of significant production losses, delayed orders, and wage stress for workers. R Shivakumar, former president of the Peenya Industries Association (PIA), highlighted the severity, noting that fuel costs account for 15-30% of production expenses. "We are already facing fiscal-end pressures and the upcoming festival season, and such disruptions will severely affect output, manpower, and the local economy," he told TOI.
Shivakumar added that gas agencies have cited supply constraints and are distributing cylinders based on availability. He urged government intervention to handhold the MSME sector and ensure a proper dispatch schedule from manufacturers, warning that without timely supply, industries may halt operations and face penalties for delayed deliveries.
Global Factors and Sector-Wide Disruptions
Industry representatives point to global factors exacerbating the crisis. India imports 65–66% of its LPG, with over 90% sourced from war-ravaged West Asia, leading to supply chain vulnerabilities. The shortage is disrupting furnace-based operations, gas cutting, and moisture-removal processes across key sectors such as foundries, fabrication units, powder coating, and pharmaceuticals. For micro enterprises operating on thin margins, rising fuel costs and supply uncertainty are adding to working capital stress.
DP Danappa, president of PIA, warned that prolonged disruption could lead to reduced industrial output, supply chain bottlenecks in engineering and automobile components, increased manufacturing costs, and potential job losses across the MSME ecosystem. Despite the gravity, no formal meeting has been convened by the industries department to address the crisis or discuss mitigation measures.
Stakeholders Voice Concerns Over Operational Halt
Ramesh KN, owner of RKN Heat Treatment Solutions: "We use heat treatment extensively for automobile parts, relying on LPG cylinders. We require about 10 cylinders monthly, costing around Rs 10,000. With supply stopped, we cannot continue production or supply parts due to gas shortage."
S Manjanna, Alliage Metal Casting Pvt Ltd: "There is no acute shortage, but supply has significantly reduced. We used 10 cylinders daily; now it's down to five. LPG is essential for sand moulds, moisture removal, and gas-cutting. Furnace operations are affected, and much work has halted."
Keshav Murthy, owner of Bharani Industries: "We are in one of the worst phases. As a fabrication industry, we depend on gas for cutting and welding, using about 100 cylinders monthly. Now, we manage with just a handful. Despite this, we continue paying labourers to retain our workforce."
Economic Significance and Urgent Calls for Action
Peenya, spread over nearly 50 square kilometers, is one of Asia's largest industrial clusters, employing close to 13 lakh workers. It generates an annual turnover of about Rs 35,000 crore and contributes nearly Rs 8,500 crore in exports, making it a critical pillar of Karnataka's manufacturing ecosystem. The ongoing crisis underscores the urgent need for coordinated efforts to stabilize gas supply and safeguard the region's economic vitality.
