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Tea industry: Blow from natural gas price now

The steep hike in the price of natural gas and heavy rains may deal the last blow to the tea industry that is still to recover from a series of odds like Covid-19

Tea

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  17 May 2022 2:30 AM GMT

STAFF REPORTER

GUWAHATI: The steep hike in the price of natural gas and heavy rains may deal the last blow to the tea industry that is still to recover from a series of odds like Covid-19, a prolonged dry spell last year, shortage of coal etc.

Maximum tea factories of the gardens in Golaghat, Jorhat, Sivasagar, Dibrugarh and Tinsukia districts use natural gas to wither and dry tea leaves. The price of national gas has increased four-fold since last year, leading to an increase in the cost of production by Rs 6-8 per kg.

The state has around 296 tea factories. Assam Gas Company Ltd (AGCL) supplies natural gas to most of the tea factories of Upper Assam. AGCL procures natural gas from ONGC and OIL and supplies around 6.5 lakh standard cubic metres (scum) of natural gas to the tea factories per day.

In July 2021, the price per thousand scum of natural gas was Rs 5,085. In April 2022, it increased to Rs 21,119. This steep hike in the price of natural gas is lethal enough to deal a death blow to the tea industry. The Government of India revises the price of natural gas from time to time.

According to sources, the industries using natural gas in the Northeast get 40 per cent subsidies. However, this subsidy is meant only for the tea factories established before 2004. Since the price of natural gas goes up frequently and sharply, subsidies can hardly check the rise in production cost.

A source associated with the tea industry said, "If State Government does not come forward to give the tea factories succour against the hiked price of natural gas, the tea industry may suffer a fatal blow. Covid-19 ravaged the tea industry for two years. Following this was the extreme dry spell from March to May in 2021. It reduced tea production drastically. On the contrary, the heavy rain this season is a dampener for tea production in the state. The industry needs mixed weather from March to May for good and quality tea production. The coal-based tea factories had to buy coal at high prices. And that had its cascading effect on the production and cost of tea."

Also Read: Hike in price of natural gas has increased CoP of made tea: NETA


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