West Asia Tensions Impact India's Fertiliser Industry

India Urea Production Hit as LNG Disruptions Force Plants to Run at Half Capacity​

New Delhi, March 22: India’s urea production has taken a hit as fertiliser plants across the country are operating at nearly half their capacity following disruptions in liquefied natural gas (LNG) supplies through the Strait of Hormuz, according to industry sources.

LNG Supply Disruptions Trigger Force Majeure​

Petronet LNG Ltd, which runs India’s largest LNG receiving terminal, has declared force majeure after upstream suppliers reported their inability to deliver contracted LNG volumes. The disruption stems from cargo movement challenges through the Strait of Hormuz amid rising tensions in West Asia.

Gas Supply Cuts Impact Fertiliser Units​

The declaration has led to a chain reaction in domestic gas distribution. State-run companies GAIL (India) Ltd, Indian Oil Corporation Ltd (IOC), and Bharat Petroleum Corporation Ltd (BPCL) have curtailed gas supplies to fertiliser plants that rely on LNG under RasGas contracts.

According to industry sources, gas availability has dropped significantly, with supplies currently at around 60 to 65 percent of normal levels.

Production Slowdown Across Urea Plants​

With reduced gas availability, urea manufacturing units are now operating at roughly half their installed capacity. The cut in feedstock supply has directly affected production levels, creating pressure on fertiliser output across the country.

The situation highlights the vulnerability of India’s fertiliser sector to global energy supply disruptions, especially those linked to critical maritime routes such as the Strait of Hormuz.