Shares of Indian fertilizer companies rallied on Tuesday after the government issued the Natural Gas Regulation Order, 2026.

The Fertilisers and Chemicals Travancore, Chambal Fertilisers & Chemicals, Rashtriya Chemicals & Fertilizers, and Deepak Fertilisers & Petrochemicals Corporation, among others, gained as much as 18%!

According to the order, the Natural Gas supply to fertilizer plants will be capped at 70% of the last six-month average, and the units will not use the gas supplied to them for any other purpose other than the production of fertilisers.

Why Is Natural Gas Important For Fertilizer Companies?

  • A majority of it is consumed as feedstock, and used in the production of Ammonia, a primary input for the production of Urea.
  • It is also used to generate extreme heat and a high-pressure scheme needed for the chemical reactions used in the production process of fertilizers.

Disruption Of Supply

Qatar Energy, one of the largest gas producers, declared a force majeure as drone attacks from Iran during the ongoing war in West Asia have caused damage to its infrastructure. This leads to a downward chain reaction among its clients as well.

The Kharif season is just around the corner, and with ongoing geopolitical conflicts, the supply chain is already under stress.