Assam tea industry moves AGCL asking for relief to reduce production cost

 

Guwahati, May 25:  The tea industry has moved Assam Gas Company Limited (AGCL) asking for sops to reduce cost of production of tea in Upper Assam tea gardens in view of rising prices of natural gas used as fuel for manufacturing tea in these estates.

In a letter of request signed by the Secretary General of Tea Association of India (TAI), P K Bhattacharjee and addressed to the Managing Director of the AGCL, the tea association, in order to reduce the rising cost of production, has urged the latter to consider reduction in the following billing components of natural gas supplied to the tea gardens:

 

  • Minimum demand charges,
  • distribution charges,
  • Marketing margin charges,
  • VAT etc.

 

The Ministry of Petroleum and Natural Gas, Govt. of India on 31.03.2022 raised the prices of domestic natural gas by more than 110 per cent to US $6.1 per MMBTU for the first half of FY23, (1st April, 2022 – 30th September, 2022), compared to the October 2021-March 2022 period.

 

Though it is understood that natural gas pricing are a function of market supply and demand, the tea industry in Upper Assam is dependent on gas supplied by AGCL and this abrupt increase of price of natural Gas has put the Industry in jeopardy which has resulted in steep rise in cost of production of made tea.

 

The per 1000 scum rate of natural gas, supplied to tea gardens, has gone up by four times during the last 10 months, resulting in an increase in the cost of production (CoP) of made tea from Rs. 12 per Kg to Rs. 20 per kg.

 

The TAI Association looks forward to a benevolent response from the government by taking into cognizance the ground realities and assist the Industry on the face of mounting cost of production where ‘natural gas’ is an input component.

 

 

 

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