Shortage Of Commercial LPG Hits MSMEs
Vijayawada: Shortage in commercial LPG supply to micro, small and medium enterprises (MSMEs) is having a major impact on production. A 40% reduction in supply is leading to rising costs and imminent layoffs of workers in both Andhra Pradesh and Telangana.
While AP has food processing, pharmaceuticals, agro-based units and ceramics under its MSME sector, Telangana has manufacturing, plastics, packaging, automobile, energy, defence, aerospace etc. in its MSME sector.
Under the influence of the ongoing US-Iran conflict, oil marketing companies have reduced commercial LPG supplies, resulting in a major impact on the functioning of many units. Some units that have signed MoUs for the supply of raw materials and other components are unable to fulfill them due to the huge negative impact on production.
We are also witnessing cost increases.
Micro SMEs say that production has been negatively affected by 40 percent due to the interruption in commercial LPG supply in the last two weeks, and that they may face a serious crisis if the same situation continues for a while.
They urged the central and state governments to constitute a task force comprising all stakeholders such as RBI, state-level bankers committee, bankers, industries department and others to find a solution on how to overcome the ongoing crisis in the MSME sector.
Those who called for the reduction of relevant taxes, the reduction of electricity tariffs, and the release of incentives previously announced by both governments to existing units, warned that if they are not given any support, they may fall into the troubled assets of bankers.
MSMEs are calling for increased supply rates to help them overcome losses.
APK Reddy, national president of the federation of small and medium enterprises, said, “The MSME sector is facing a serious crisis due to decline in production and increase in cost and if the central and state governments do not come to their aid, it will result in job loss and closure of units.” he said.
