Fertiliser Stocks Surge Up to 17% Following Government's Natural Gas Supply Regulation Order 2026

Fertiliser Stocks Surge Amidst Natural Gas Regulation Order

On March 10, the Government of India issued the Natural Gas Regulation Order, 2026, invoking the Essential Commodities Act, 1955 to regulate the availability, supply, and equitable distribution of petroleum and petroleum products, as well as natural gas.

The order prioritizes sectors such as domestic PNG, CNG for transport, LPG production, pipeline compressor fuel requirements, supply to fertiliser plants, gas supply to tea industries, and other industrial consumers. The natural gas supply to fertiliser plants will be capped at 70% of the last six-month average.

As a result, shares of Fertilisers And Chemicals Travancore Ltd, Rashtriya Chemicals and Fertilizers Ltd, and National Fertilizers Limited rose by 17%, 11.4%, and 10.5%, respectively.

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Natural gas is the primary feedstock for producing nitrogen-based fertilisers in India, accounting for over 80% of the production cost of urea. The global supply of natural gas has been disrupted, including in India, due to Qatar Energy declaring a force majeure following drone attacks in West Asia.

India, the world's second-largest consumer of fertilisers, relies heavily on imports for DAP and potash, making it vulnerable to disruptions in key shipping lanes. Fertiliser companies have agreed to advance scheduled plant shutdowns for maintenance to March, allowing firms to utilise the period of global disruption productively.

As of Friday, total fertiliser reserves stood at 177.31 lakh tonnes, a 36.5% increase from 129.85 lakh tonne a year earlier. Urea stocks stood at 59.30 lakh tonne, while DAP inventories were at 25.13 lakh tonne and NPKS fertilisers reserves reached 55.87 lakh tonne.