LPG Shortage Hits Pune Auto Industry, MSMEs Forced to Cut Production

Pune, 24th March 2026: An acute shortage of LPG has begun to disrupt the automobile supply chain in Pune, one of India’s major vehicle manufacturing hubs. The crisis has forced several companies to scale down production, while some smaller units are facing temporary shutdowns.

The shortage has primarily hit thousands of micro, small and medium enterprises (MSMEs) that supply key auto components to large manufacturers. Nearly 30% of these units—particularly those involved in plating, coating and fabrication—rely heavily on LPG for furnace operations. Over the past two weeks, however, limited supply has significantly affected their production capacity.

Industry sources said around half of the units in the supply chain have already exhausted their LPG stock. With no immediate replenishment, many have been compelled to reduce output or suspend operations. This has started to affect major automobile companies, which usually maintain spare parts inventory for only about a week.

Switching to alternative fuels such as electricity or diesel is proving expensive for small industries. The shift requires additional investment and can increase production costs by nearly 10% compared to LPG. As a result, many MSMEs are hesitant to adopt alternative energy sources, especially amid uncertainty over when normal LPG supply will resume.

Pune’s automobile industry is supported by a large network of MSMEs, numbering in the thousands, which play a critical role in sustaining the supply chain. Taking note of the situation, the state industry department has begun assessing the impact on LPG-dependent units. The state’s Development Commissioner recently held a virtual meeting and directed officials to gather detailed information on the industries affected by the shortage.

The situation has also begun to impact the workforce. Lakhs of workers employed in the supply chain—many of them migrants from North India—depend on small 5-kg LPG cylinders for cooking. With disruptions in cylinder distribution, many workers are facing difficulties in preparing food and some have started returning to their native places. This reverse migration could lead to a labour shortage in the coming days, further affecting industrial output.

Industry experts have warned that if LPG supply is not restored soon, the disruption could intensify and impact Pune’s position as one of the country’s key automobile manufacturing centres.