Industry stress
Fertiliser
LNG import cost above $13.5/MMBtu; urea margin thin
editorial · as of 1 Apr 2026
Operator read
Fertiliser: LNG feedstock cost elevated; subsidy watch.
Gas-intensive sector; urea and complex fertiliser output depends on gas and naphtha feedstock costs. Government subsidy covers the gap between cost and MRP.
Stress level: Watch. Check feedstocks and drivers below.
Feedstock costs
Stress drivers
- Natural gas price above $3/MMBtu
- LNG import cost exceeding $14/MMBtu
- Naphtha price rise above ₹68,000/MT
- Subsidy disbursement lag from DoF
- Ammonia spot price elevation
Why it matters
India produces 50+ mt of fertilisers annually but remains an importer of urea. Gas feedstock cost determines whether domestic urea production is viable or whether import-plus-subsidy is cheaper. Government subsidy covers the gap between MRP and production cost; at current gas prices, the annual fertiliser subsidy bill runs ₹1.7-2.0 lakh crore. Any shock to natural gas supply or price directly pressures the fiscal account.
Source