Industrial sector suffer because of heavy rains

Due to the unceasing rain in major parts of the country, the industrial sector is suffering from heavy loses. As a safeguard, ONGC, Reliance, Essar, and many other corporates are forced to shut their units, leading to restricted access to finished products and raw materials.

The Ukai dam flooded ONGC by 4-5 feet water and as a result, ONGC had to shut down at 01:53 a.m. By morning, the boundary wall had collapsed, and the water level at the plant rose to ten feet.

Subsequently, the offshore platforms of ONGC’s Bassein field and the joint venture fields of Panna-Mukta and Tapti, which supplied 40 million standard cubic meters of gas per day to the Hazira plant, were closed.

ONGC’s managing director and chairman, R.S Sharma said that the gas production from the fields connected to Hazira has been suspended as the plant was in no condition to take gas from the fields and so the wells had to be shut.

Large parts of Andhra Pradesh, Maharashtra and Gujarat and plants located in Gujarat and Maharashtra have been hit hard with rain.

Reliance Industries Ltd has a petrochemical complex at Hazira and because of the breakdown of floods, had to shutdown in two of the 14 plants at the complex following the ONGC decision.

The production of Essar Steel was reduced by 40 to 50 per cent at Hazira. Essar also reduced the power supply from its independent power project from 515 MW to around 100 MW.

The category one customers, including, IndianOil’s Mathura refinery, IPCL, the heavy water plant of the Atomic Energy Commission, and small and medium-sized industries located near the Agra and Firozpur area will however be supplied with the left over gas known as linepack. The officials said that they have started pushing the left over gas into the pipelines for these customers.

The future seems dark for category two and three costumes. The alternatives of gas, naphtha and furnace oil are not available in sufficient quantities in the market and therefore, the category two and three companies will find it difficult to switch to any other fuel.

As a consequence of all this, Sensex could head lower on Wednesday, led by Reliance Industries and ONGC as they shut down their plants owing to the heavy rains and floods. Weak Asian markets and high oil prices will also weigh on sentiment.