Rising Natural Gas Prices Impact Fertiliser Subsidies Amidst West Asia Conflict

The conflict in West Asia has caused natural gas prices to surge by 60%, creating challenges for India's fertiliser industry and increasing the government's subsidy obligations. With energy supply lines disrupted, natural gas, crucial for nitrogen-based fertilisers, is meeting only 80% of demand, necessitating spot market purchases of liquefied natural gas (LNG).

Aparna S Sharma, Joint Secretary in the Department of Fertilisers, confirmed that India possesses sufficient fertiliser stocks for the upcoming Kharif season despite the volatile situation. The Gulf region, previously meeting substantial portions of India's urea, DAP, and LNG demands, remains affected, driving up input costs.

To counteract supply cuts, gas availability to urea plants has been increased. While ensuring farmers receive fertilisers at stable prices, the government is diversifying imports from countries beyond the Gulf. Cooperative measures have been implemented to monitor supply chains and manage hoarding.