Gas Supply Disruptions Threaten Fertilizer Production

Fertilizer Association of India Urges Government Relief Amid Gas Supply Disruptions​

New Delhi, March 23, 2026 – The Fertilizer Association of India (FAI) has urged the government to provide financial relief to urea producers affected by ongoing gas supply disruptions, warning that production shortfalls and a shortage of packaging materials could disrupt fertilizer supplies ahead of the monsoon season.

In a letter to the government, FAI requested energy cost reimbursements and penalty waivers for plants operating under constrained gas supplies, citing extraordinary circumstances due to the ongoing geopolitical crisis.

Under the Natural Gas Supply Regulation Order notified on March 9, 2026, fertilizer plants are classified under Priority Sector-2, receiving 70% of their six-month average gas consumption. FAI noted that this restriction is limiting production at plants operating under the New Urea Policy 2025, modified NPS III, and NIP 2012 frameworks.

The industry body asked the government to recognize actual energy consumption or applicable energy norms—whichever is higher—during the disruption period, and also requested exemption or reimbursement of imbalance penalties imposed by gas suppliers, along with full reimbursement of gas quantities and costs invoiced during the crisis.

FAI additionally warned of a crisis in bagging materials, as some domestic polypropylene and high-density polyethylene (HDPE) granule suppliers have reduced output, threatening the packaging supply chain at fertilizer plants and ports.

“The reduced availability is likely to derail all attempts to smoothly dispatch fertilizers during the crucial inventory build-up season,” FAI said, urging granule suppliers to maintain consistent supply volumes.

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The Kharif sowing season, beginning in June, typically drives peak demand for urea, India’s most widely used fertilizer, making timely supply critical.