Wedoany.com Report on Mar 14th, In March 2026, the Indian government introduced new gas supply regulations aimed at ensuring stable gas supply to priority sectors during specific regional situations, sparking investor interest in the fertilizer sector. Following the announcement, shares of major fertilizer manufacturers such as Fertilizers and Chemicals Travancore (FACT), Rashtriya Chemicals and Fertilizers (RCF), Chambal Fertilisers, and Deepak Fertilisers rose between 5% and 20% during the trading session.
Specifically, FACT's stock surged 20% on the Bombay Stock Exchange, closing at the upper circuit limit (₹795.10), while RCF soared over 16% to close at ₹127.80. This rally in fertilizer stocks stemmed from the issuance of the 'Gas Regulation Order 2026,' which governs the allocation of gas for domestic piped natural gas supply, compressed natural gas for transportation, liquefied petroleum gas production, and other areas.
According to the new regulations, gas supply to the fertilizer sector will be capped at 70% of the average consumption over the past six months. Antu Eapen Thomas, a research analyst at Geojit Investments, stated, "Investors will closely watch for signs of easing geopolitical tensions." He added that the current off-season and advance maintenance at some facilities might alleviate near-term gas demand.
The global gas supply chain remains tight following QatarEnergy's declaration of force majeure on certain cargoes. This announcement triggered ripple effects in the international energy market, disrupting contractual supplies. An ICRA Research report noted that rising prices of ammonia and liquefied natural gas could impact the profitability of phosphatic and potassic fertilizer producers unless adjustments are made in the upcoming subsidy rate revision. This could potentially increase the Indian government's fertilizer subsidy budget for FY2027 (estimated: ₹1.7 trillion).
Urea prices rose to approximately $597 per tonne on March 4, 2026, up from $484 per tonne on February 27, 2026, reflecting supply disruptions. Diammonium phosphate prices saw a similar increase. The report warned, "Given that the current situation reflects supply shortages and limited domestic production, India faces a challenging task in maintaining adequate fertilizer supply levels for the upcoming season." Overall, the gas supply regulations have had a positive impact on fertilizer stocks, and the market will continue to monitor subsequent developments.
