PNG Supply Crisis Puts 200 Gobindgarh Units Near Closure

March 13, 2026

Punjab’s major industrial town, Mandi Gobindgarh often referred to as the state’s “Steel City” is facing a serious industrial crisis as around 200 rolling mills struggle with reduced supply of piped natural gas (PNG). Industrialists say the disruption has created uncertainty for the sector, with several units now on the verge of shutting down operations due to rising fuel costs and inconsistent gas availability.

The crisis has been triggered largely by disruptions in global energy supplies following geopolitical tensions in West Asia. These tensions have impacted shipments of liquefied natural gas (LNG), which in turn has affected PNG supply to industries across India.

As a result, industrial units in Mandi Gobindgarh are finding it increasingly difficult to maintain production levels, leading to fears of large-scale economic losses and job cuts in the region.

Rolling Mills Struggle to Continue Operations

Industry representatives say about 200 rolling mills in the town are directly affected by the reduced gas supply. Many of these mills rely entirely on PNG to run furnaces used for processing steel products.

According to industrialists, around 160 units had shifted to gas-based fuel systems in recent years after environmental regulations required industries to move away from coal and adopt cleaner fuels such as PNG.

However, the sudden shortage of natural gas has disrupted production cycles. Several units have already reduced operations, while some owners claim that running the furnaces intermittently is causing technical and financial difficulties.

Industry leaders warn that if the supply crisis continues, more mills could suspend operations temporarily or permanently.

Dozens of Units Already Shut Down

The impact of the gas shortage is already visible in the region. Industrial associations claim that nearly 35 rolling mills have already shut down due to the rising cost and limited availability of gas.

Owners say they invested significant capital—often crores of rupees—to convert their furnaces from coal to gas-based systems in compliance with environmental rules. But with PNG supply becoming unreliable, many now feel trapped between regulatory requirements and fuel shortages.

Applications for new PNG connections have also reportedly been rejected due to insufficient gas availability, leaving some entrepreneurs unable to expand or start new industrial operations.

Wider Impact on Workers and Economy

The crisis threatens to impact thousands of workers employed in the steel and rolling mill sector in and around Mandi Gobindgarh. Many of these workers depend on daily wages, making them vulnerable to sudden shutdowns of factories.

Industrial experts warn that prolonged disruptions could affect the entire steel supply chain, including construction and engineering sectors that rely on steel products manufactured in the region.

Industry bodies have urged both the state and central governments to intervene immediately and ensure uninterrupted gas supply to industrial clusters. They argue that stable fuel supply is essential to prevent economic losses and protect jobs.

Government Measures and Industry Expectations

To address the nationwide gas shortage, the Union government recently issued the Natural Gas (Supply Regulation) Order, 2026, which aims to ensure equitable distribution of gas among different sectors. However, the policy prioritises domestic consumers and essential services, meaning industrial users may continue to face restricted supply in the short term.

Industrialists in Punjab are now seeking special relief measures, including assured gas supply or temporary permission to use alternative fuels until the situation stabilises.

Without immediate intervention, experts warn that the industrial backbone of Mandi Gobindgarh could suffer significant long-term damage.