According to the order, supply of natural gas to fertilizer plants will be limited to 70% of their average consumption in the last six months. It also specifies that the gas allocated to these units cannot be used for any purpose other than fertilizer production.
Natural gas plays an important role for fertilizer companies because much of it is used as a feedstock in the production of ammonia, which is the primary raw material needed to produce urea. In addition, gas is also used in the production process to create the necessary temperature and high pressure environment for chemical reactions.
The directive comes amid an ongoing conflict in West Asia, which has disrupted liquefied natural gas (LNG) shipments through the Strait of Hormuz. With key suppliers calling for force majeure, the government has ordered natural gas supplies to be diverted to priority sectors of the economy.
This order is issued under the Natural Gas (Regulation of Supply) Order, 2026, which derives its authority from the Essential Commodities Act, 1955. The Act empowers the Center to regulate the supply, distribution and trade of petroleum products to ensure equitable distribution.
Last week, Gujarat Gas and Petronet LNG requested power for their industrial customers as per the provisions of their gas supply agreements, capping the daily contracted quantity.
According to the order, four sectors have been assigned the highest priority and will continue to receive 100% of their average gas consumption in the last six months. These sectors include Domestic Pipeline Natural Gas (PNG), Compressed Natural Gas (CNG) used in transportation, Liquefied Petroleum Gas (LPG) production, including well pipeline requirements and pipeline requirements and other essential requirements.
Fertilizer plants are placed in the second priority category and will receive 70% of their average gas consumption in the last six months, subject to operational availability.
The third priority category includes tea industries, manufacturing units and other industrial consumers connected to the national gas grid, which will receive 80% of their average consumption in the last six months.
The fourth priority group covers industrial and commercial consumers served by city gas distribution (CGD) companies, who will also receive 80% of their average gas consumption in the last six months.
FACT shares fell the most, gaining 17%, while RCF and National Capital rose 12% each. Gujarat state Surrey and Coromandel International grew by up to 6%. Paradip Phosphates and Chambal also rose to 6%.
((rejection: The recommendations, suggestions, opinions and views given by the experts are their own. (It does not represent the views of The Economic Times.)
