Government Addresses Energy Supply Concerns, Ensures Strong Fertiliser Availability and Steady LPG Supply
Ongoing tensions in the Middle East have raised concerns about global energy supplies, but the Indian government has assured that the country’s fertilizer availability remains stable. During a recent ministerial briefing, officials confirmed that supplies of key fertilizers, including urea and DAP, are exceeding current requirements. Additionally, the government is taking measures to ensure adequate fuel supplies, despite reports of panic buying at some distribution points.
Fertilizer Availability Remains Strong
Aparna Sharma, the additional secretary in the department of fertilizers, emphasized that the availability of fertilizers in India is robust and well-managed. She stated that the supply has consistently surpassed the demand across all major fertilizers, with no shortages reported. For the period from April 1 to April 26, 2026, the availability of urea stood at 71.58 lakh metric tonnes (LMT), significantly higher than the required 18.17 LMT. Similarly, DAP availability reached 22.35 LMT against a requirement of 5.90 LMT. Sharma reassured that the department is committed to maintaining fertilizer security, ensuring that farmers have the necessary resources for the upcoming kharif season.
Fuel Supply Assurance Amid Panic Buying
Sujata Sharma, joint secretary of the ministry of petroleum, addressed concerns regarding fuel availability, particularly commercial LPG. She noted that the allocation of commercial LPG has been increased by up to 70% to meet rising demand. Despite reports of panic buying at some distributorships, she assured that there is no shortage of LPG and that supplies remain adequate. The majority of LPG deliveries are being conducted through an authentication system, with 93% of cylinder distributions completed using an authentication code. To date, over 165,000 tonnes of commercial LPG have been sold, indicating a stable supply chain.
Rising Costs and Import Strategies
As global disruptions continue to impact fertilizer markets, India is preparing to secure urea supplies at significantly higher prices. India Potash Ltd (IPL), the government-nominated importer, is in the process of procuring 25 lakh tonnes of urea at prices ranging from $935 to $959 per tonne. This marks a substantial increase compared to the $508 to $512 per tonne seen in previous tenders. The rise in prices is attributed to escalating input costs, including a doubling of gas rates. Suppliers are expected to source urea from various countries, including Russia, Algeria, and Nigeria, while avoiding routes through the Strait of Hormuz, which has been affected by ongoing conflicts.
Future Outlook and Subsidy Concerns
Officials have expressed confidence that fertilizer availability for the kharif season will be sufficient, with stocks expected to remain comfortable ahead of peak demand in June. However, rising costs of raw materials and finished fertilizers are projected to push the subsidy bill beyond Rs 2 lakh crore, approximately 20% higher than earlier estimates for the 2026-27 fiscal year. India relies on imports for about 35-40% of its fertilizer needs, with Gulf nations supplying a significant portion. The ongoing conflict in the Middle East continues to strain energy supplies globally, raising concerns about future disruptions in both fertilizer and LNG shipments, which are crucial for urea production.
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