The government will increase supply of LNG to urea plants to 90% of their average capacity from Monday thus boosting output prospects, according to an official statement on Sunday.
“Considering the available inventory and scheduled LNG cargo arrivals, overall gas supply available to fertilizer plants will be increased to approximately 90% of their average consumption over the preceding six months, effective April 6, 2026,” according to the statement.
Higher supplies of LNG is likely to boost urea production ahead of forthcoming kharif season, when farmers start applying soil nutrient by the end of June after sowing of paddy, an official said.
Currently, supply of LNG, a key feedstock for urea manufacturing, is supplied to plants at around 70-75% of their last six months average consumption, it stated.
ALSO READBlack mass recyclers warn against sudden export curbs
Reversing the Dip
“All industrial consumers including fertilizer plants have been advised to provide their additional requirement on a spot basis so that the same may be arranged by the Gas marketing companies”, according to an official note.
Last week a fertiliser ministry official had said that monthly urea output had reduced to 1.8 million tonne (MT) last month from a monthly average of 2.4 MT.
At the beginning of March, the urea production had dipped to 60% of their capacities because some of the plants went on annual maintenance shutdown and LNG supply issues during current lean months in terms of fertiliser demand.
On March 17, to boost LNG supplies, the government approved the purchase of LNG from spot markets in countries such as Australia, Russia, and the United States.
“However, through spot buying of LNG, the urea production, which dipped to 60% of the capacities, has reached close to 80% of the capacities,” Aparna S Sharma, additional secretary, Department of Fertilisers, had stated in the briefing recently.
Sharma had stated that some urea units, which went for annual shutdown, have started operations after the commencement of gas supplies.
Last month, the government had invoked the Essential Commodities Act for the first time to ensure the supply of natural gas, a key raw material, to fertilizer plants.
About 80% of urea production in the country uses LNG, while the rest uses domestic gas. At present, 30 out of 32 urea units use natural gas as feedstock.
War and Logistics
Currently, around 10% to 15% of LNG is purchased from the spot market, while the rest is sourced under long-term contracts with Qatar and the UAE.
Fertiliser imports from the Gulf region account for the country’s consumption of 20%-30% of urea, 30% of diammonium phosphate (DAP), and 50% of liquefied natural gas (LNG), a key feedstock in urea production.
LNG imports from Qatar and the United Arab Emirates (UAE) are shipped through the Strait of Hormuz, which has been blocked because of the west Asia war.
ALSO READDirect benefit transfers down 5% to Rs 6.6 lakh crore in FY26
Current fertiliser stocks stand at about 18 MT — 6.19 MT (urea), 2.33 MT (DAP), 5.66 MT (NPKs), 2.52 MT (SSP), and muriate of potash (1.27 MT) — compared to 14.7 MT a year ago.
Meanwhile, the government had extended the state trading enterprise status for Indian Potash for importing urea on government account until March 31, 2027.
The fertiliser requirements of all varieties for forthcoming season is projected at 39.05 million tonne (MT), out of which 18 MT or 46% of the requirement is available at opening stock, the agriculture ministry had stated last week
“This is a fairly good amount available, as by thumb rule the opening stock is about one third of the requirement,” an official said.
TOPICSLNGPetronet LNG LimitedThis article was first uploaded on April six, twenty twenty-six, at zero minutes past six in the morning.