Urea plants get additional natural gas in spot auction

New Delhi: Fertiliser companies have purchased additional natural gas from the spot market to ramp up urea production at their plants,

which are operating well below capacity due to a fuel shortage amid the West Asia crisis, a senior government official said on Thursday.

After the procurement of additional natural gas, urea plants are expected to operate at 78-80 per cent capacity compared to 62 per cent currently.

India produced 306.67 lakh tonnes of urea in 2024-25 and imported 56.47 lakh tonnes of the nutrient to meet the domestic demand.

The country has imported 98 lakh tonnes of urea in the first eleven months of this fiscal.

Fertiliser plants in the country require about 52 million metric standard cubic metres per day (MMSCMD) of natural gas to operate at full capacity, but were receiving only around 32 MMSCMD, meeting barely 62 per cent of their requirement, resulting in a significant shortfall in urea output, the official said.

To address this, a spot auction was conducted by the government, where fertiliser plants collectively sought 8.56 MMSCMD of additional gas and secured 7.31 MMSCMD, with supplies to be delivered immediately from March 19 to March 31, the official said.

With this additional procurement, the total gas availability at fertiliser plants has risen to approximately 40 MMSCMD, a jump of around 23 per cent over the earlier supply level.

Plants are now expected to operate at 78 to 80 per cent of installed capacity, compared to 62 per cent earlier, the official added.

The additional gas is expected to result in incremental urea production of 12,500- 13,000 tonnes per day until the end of this month, the official said.

The government official described the move as a significant step by the government to bridge the demand-supply gap and ensure adequate

availability of the key farm input ahead of the upcoming kharif season.

As of March 19, 2026, India has a stock of 61.14 lakh tonnes of urea against 55.22 lakh tonnes a year ago. The stock of DAP (di-ammonium phosphate) is 24.24 lakh tonnes compared to 11.85 lakh tonnes, while the stock of NPKs is 57.21 lakh tonnes against 34.44 lakh tonnes.

The Centre provides urea to farmers at a subsidised rate of 242 per bag (45 kg) (exclusive of charges towards neem coating and taxes applicable).

The difference between the cost of production and the maximum retail price is paid to the manufacturers as a subsidy.

The US and Israel have launched military strikes on targets in Iran at the end of February. Tehran retaliated with missiles and drones aimed at Israel and countries hosting US forces, including the United Arab Emirates, Qatar, Kuwait, Bahrain, Iraq, Jordan and Saudi Arabia.

Many urea plants have advanced their maintenance shutdown in view of the shortage of natural gas.

“The current lean period is traditionally when fertiliser companies schedule plant shutdowns for repair and maintenance. These companies have now come forward to prepone their maintenance scheduled to March to utilise the disruptive time to their advantage,” the Department of Fertiliser said on March 6.

Multiple global sources are also being tapped for additional imports of finished fertilisers, it added.