Fuel price hike hits MSMEs’ revival hopes

Coimbatore: The constant hike in fuel prices has hit the micro, small and medium enterprises (MSMEs) in the district hard at a time when they are struggling to remain afloat after the lockdown-induced shutdown for nearly two months. On Tuesday, petrol and diesel prices shot up to Rs 101.27 and Rs 94.44, respectively, in the district.
J James, district president, Tamil Nadu Association of Cottage and Tiny Enterprises, said the hike in fuel and raw materials had dealt a big blow on the MSMEs, which were struggling to revive from the impact of the lockdown.
Pointing out that most of the raw materials were brought to the city from other states, especially northern parts of the country, he said the transportation charges had doubled in the past two years.
James said, “Logistic companies used to charge us Rs 4,000 to Rs 4,500 for transporting raw materials weighing a tonne to the city from Mumbai about two years ago. Now, they are charging more than Rs 8,000 per tonne because of the rise in fuel prices. Similarly, goods vehicles and autos that had charged Rs 250 to Rs 300 for transporting goods to a distance of 10km have now doubled the fare.”
M V Ramesh Babu, president, Coimbatore District Small Industries Association, expressed a similar point and said the product cost had increased significantly because of the rise in prices of fuel and raw materials. “Not all the buyers are ready to revise the prices of products in tandem with the rise in manufacturing cost.”
He said most of the workers were using own vehicles to travel to the workplace. “They are now demanding the employers to revise their wages as they are forced to shell out a considerable portion of their wage on the fuel. “We have no option but to consider their demand as the skilled workers are our assets. We cannot afford to lose them.”
Many of the industries also use diesel and other lubricants in the manufacturing process. Their expenses have gone up recently, Ramesh Babu said.
K Maniraj, president, Kovai Power Driven Pumps and Spares Manufacturers Association, said most of the raw materials for making pump sets were purchased from northern parts of the country. Along with the raw material price hike, he said, their transport cost has also increased. “It has increased our burden. The government should immediately intervene and take steps to control the price rise. If not, it will be very difficult for us to survive.”
He said there were times when their margin of profit used to be at least 5%. “But nowadays, we are working only to minimize our loss. Some of us continue to manufacture products by incurring loss just to retain our customers and for the sake of being in the field, while others have left the industry without being able to bear the loss.”