Amidst West Asia crisis, India purchased natural gas at $19/unit from spot markets for fertiliser units

Spot prices of liquified natural gas (LNG), which was provided to the fertiliser industry, were secured at about $19 per metric million British Thermal Unit (MMBTU), a senior government official told reporters Monday (March 31, 2026).

“Before the war, the spot prices hovered around $11/MMBtu,” they stated, adding, “Since the war, we have purchased LNG at about $19 for our fertiliser units.”

According to the government’s observations, the global fertiliser markets have had a “sharp increase” in prices of inputs such as LNG, ammonia and sulphur, accompanied with a spike in freight and logistics costs, amidst the ongoing conflict in West Asia.

At present approximately, India would be tapping into the spot market for 30% of the fertiliser industry’s requirements.

The prevailing situation, and supply control measures, have also had an impact of the domestic production of Urea.

For context, India receives about 20-30% of their urea and 30% of their diammonium phosphate (DAP), alongside nearly half of their consumption of natural gas requirements, from the Gulf region. Essential to note, amidst the escalating conflict, Tehran also attacked facilities of QatarEnergy, which is the largest natural gas importer in the world and among India’s major suppliers.

Spurring domestic production

According to govt estimates, the total requirement for the upcoming Kharif sowing season is about 390 lakh tonnes. The total stock stands at around 180 lakh tonnes. Now, with natural gas supply to urea plants augmented to 75-80% of requirements through alternative arrangements, the urea production has increased by 12,000-15,000 tonnes per day.

“[Thus], reducing the monthly production loss from 9-10 LMT to around 6-7 LMT,” the government informed.

Essential to note, according to govt estimates, India produced 18 lakh tonnes of urea, 9-10 lakh tonnes of phosphorus and potassium fertilisers in March this year.

In addition to this, seeking to stabilise supplies of key raw materials as sulphur and LNG, India is tapping into Russia, Morocco, Australia, Indonesia, Malaysia, Jordan, Canada, Algeria, Egypt, Finland and Togo.