India’s urea production is facing tough challenges. Recent disruptions in liquefied natural gas (LNG) supplies have forced urea plants to operate at just half their usual capacity. This situation remains tense due to ongoing conflicts in West Asia.
Petronet LNG Ltd, which runs the country’s largest LNG terminal, declared force majeure. This means they can’t provide the gas they promised. As a result, state-owned gas distributors, such as GAIL and Indian Oil Corporation, had to cut gas supplies significantly. Currently, only 60-65% of the usual gas is reaching fertilizer plants, and some sites are operating at less than 50%.
This has led to urea production dropping by about 50%. Ironically, energy use at these plants has increased by 40%. Operating at lower capacities makes them less efficient, resulting in higher energy consumption for lower output. According to one operations manager, “Plants this large can’t just adjust their workload on demand. It’s a costly process.”
Coordination issues have made things worse. When disruptions occur, gas supply changes often come late at night, leaving managers unprepared for necessary adjustments. These sudden changes pose risks not only to production but also to safety and equipment integrity.
Moreover, GAIL has introduced a new pricing model that adds another layer of uncertainty. Starting March 2026, long-term gas prices will vary, further complicating financial planning for urea producers.
Looking ahead, experts warn that if this situation persists, it could lead to urea shortages just as farmers prepare for the kharif sowing season. As of mid-March, India has around 61.14 lakh tonnes of urea in stock, which is slightly better than last year but still raises concerns over availability.
In this context, the importance of stable energy supplies cannot be overstated. As India’s agricultural sector relies heavily on urea, fluctuations in production due to energy issues could severely impact food security.
For reference on energy and agriculture dynamics, check this government report.
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