Fertilizer Stocks Rally After Government Caps Natural Gas Supply to Plants
Shares of major Indian fertilizer companies surged on Tuesday, March 10, after the government issued the Natural Gas Regulation Order, 2026, introducing a cap on gas supply to fertilizer plants. The move triggered strong buying interest in stocks such as Chambal Fertilisers Ltd., Rashtriya Chemicals and Fertilizers (RCF) Ltd., Deepak Fertilisers Ltd., and Fertilisers and Chemicals Travancore (FACT) Ltd.The order comes at a time when global natural gas supply chains are facing disruptions, creating concerns over availability for industrial users.
Government Caps Gas Supply for Fertilizer Plants
Under the newly issued order, natural gas supply to fertilizer plants will be limited to 70 percent of their average consumption over the past six months.The regulation also mandates that the gas supplied under this allocation must be used strictly for fertilizer production and not for any other industrial purposes.
The directive is aimed at ensuring that limited gas supplies are prioritised for the production of fertilizers, which are essential for the agricultural sector.
Why Natural Gas Matters for Fertilizer Production
Natural gas plays a central role in fertilizer manufacturing.It is primarily used as a feedstock in the production of ammonia, a critical component used in making urea fertilizers.
In addition to acting as a raw material, natural gas is also used to generate the high temperatures and pressure conditions required for the chemical reactions involved in ammonia production.
Any disruption in gas supply can therefore directly impact fertilizer output and production efficiency.
Global Gas Supply Disruption Adds Pressure
The supply constraints come amid global disruptions in natural gas availability.Qatar Energy, one of the world’s largest gas producers, recently declared force majeure after its infrastructure was damaged in drone attacks launched from Iran during the ongoing conflict in West Asia.
The incident has affected gas supplies globally, including shipments linked to India.
Fertilizer Stocks Gain Up to 11%
Following the government’s order, fertilizer company stocks rallied sharply in Tuesday’s trading session.- FACT Ltd. shares climbed 11.4 percent to ₹736.7, making it the second-best performer on the Nifty 500 index during the session. The company has a limited free float, with the government holding around a 90 percent stake.
- RCF Ltd. shares advanced 6.6 percent.
- Chambal Fertilisers Ltd. rose 5.7 percent.
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