The Ministry of Heavy Industries (MoHI) has issued an advisory for the automobile sector to optimise production and lower fuel consumption amid the rising fuel supply crisis through the Strait of Hormuz over the ongoing conflict between the US, Israel, and Iran.
has also asked to optimise production schedules to lower fuel usage during standby operations. The auto companies have also been advised to shift from oil-based fuels to electricity wherever feasible. Additionally, they have been encouraged to use recycled aluminium and alternative materials for non-critical parts.
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Recently, the Petroleum Ministry stated that there is no shortage of petrol and diesel, and that current fuel reserves are sufficient for roughly 60 days. However, similar to gas supply, the government may be prioritising fuel for public usage, which is why it has asked the automobile industry to cut down on fuel consumption. At the same time, there are signs of supply issues on the industrial side.
And since gas is being prioritised for households, its availability for industries has dropped to about 80% of normal levels. As a result, components suppliers working with carmakers like Maruti Suzuki, Tata Motors, and Mahindra are starting to feel the impact, even though demand for vehicles remains strong.
If the ongoing tensions in the Gulf region continue for long, this could affect the component production and eventually slow down vehicle manufacturing as well.
