India Urges Automakers to Cut Fuel Use Amid Gulf Energy Disruption

India's Ministry of Heavy Industries has advised automakers and parts suppliers to reduce fuel consumption and optimise production. This guidance comes as the ongoing conflict involving Iran disrupts oil and gas imports from the Gulf region. The advisory, dated March 25, urges a shift from oil-based fuels to electricity and increased use of recycled materials due to rising costs and limited availability.

Key Highlights

• India advises automakers to cut fuel use and optimise production amid Gulf energy supply disruption
• Automotive suppliers to Maruti Suzuki Tata Motors and Mahindra report gas shortages affecting operations
• Government urges shift from oil-based fuels to electricity and use of recycled materials
• Industrial users currently receive about 80 percent of their average gas needs
• Shortages of materials like aluminium are affecting multiple industries beyond automotive

Government Advisory Details

The ministry's memo instructs companies to transition factory operations from oil-based fuels to electricity wherever possible. It also encourages the use of recycled aluminium or alternative materials. The government aims to address the impact of supply disruptions on industrial supply chains and raw material access.

India is one of the world's largest importers of oil and natural gas. The country is particularly vulnerable to disruptions in Gulf energy supplies. The government has already prioritised gas supplies for households over industry. As a result, industrial users currently receive about 80 percent of their average gas needs.

Impact on Automotive Sector

Parts suppliers to major Indian carmakers, including Maruti Suzuki, Tata Motors, and Mahindra, have reported gas shortages. These shortages have affected operations, even as vehicle sales continue to grow. The ministry's advisory specifically calls for optimising production schedules to minimise idle and standby fuel consumption.

The document states, "Wherever technically feasible, a transition from oil-based fuels to electricity may be considered. Further, production schedules may be optimised to minimise idle and standby fuel consumption."

Broader Industry Effects

Supply pressures extend beyond the automotive sector. The government notes shortages of materials like aluminium are also impacting other industries. For example, beer manufacturers have reported supply chain disruptions due to these shortages.

India's Ministry of Heavy Industries did not immediately respond to requests for comment. According to the Oil Ministry, India has crude oil and fuel stocks sufficient for around 60 days.