Kolkata: India’s fertiliser companies such as Chambal Fertilisers and Chemicals, Rashtriya Chemicals and Fertilizers, Deepak Fertilisers and Petrochemicals Corporation and Fertilisers And Chemicals Travancore have all risen on Tuesday, March 11. Shares of Fertilisers And Chemicals Travancore jumped the most — by a whopping 17.87%. Prima facie, this appears a bit strange since these companies are dependent on the supply of gas, which has faced a jolt following the Iran US conflict that started on Feb 28. LNG is used as an input as well as a fuel to generate heat and high-pressure needed for the chemical reactions used in the production process.
Price of these stocks
According to the data at around 12:30, the shares of Chambal Fertilisers and Chemicals, Rashtriya Chemicals and Fertilizers, Deepak Fertilisers and Petrochemicals Corporation and Fertilisers And Chemicals Travancore were quoting as follows:
Chambal Fertilisers and Chemicals: Rs 433.20 (+5.08%)
Rashtriya Chemicals and Fertilisers: Rs 122.60 (+11.51%)
Deepak Fertilisers and Petrochemicals Corporation: Rs 978.45 (4.97%)
Fertilisers And Chemicals Travancore: Rs 780.40 (+17.87%)
Natural Gas Regulation Order, 2026 invoked
On Monday, March 9, the Centre has invoking powers under the Essential Commodities Act, 1955 and issued the Natural Gas (Supply Regulation) Order, 2026 following the supply disruptions natural gas in the country. The order was notified by the Ministry of Petroleum and Natural Gas on March 9. The immediate trigger was the disruption in supply of LNG (liquefied natural gas) consignments through the Strait of Hormuz through which suppliers send shipments. Moreover, Qatar, one of the biggest suppliers of LNG to India has invoked force majeure clauses and stopped sending LNG after its production facilities were hit by missiles.
The objective of the Centre’s move was ensuring fair distribution and continued availability of natural gas. The priority was for domestic consumption, transport and fertiliser production. According to the Priority Allocation Framework under the order it was stipulated that natural gas supply will be distributed according to a four point priority layer.
Priority I: These will receive 100% of the average gas consumption of the past six months but subject to availability. These are domestic piped natural gas; compressed natural gas for transport; LPG production, including shrinkage requirements and pipeline compressor fuel and other essential pipeline operational needs
Priority Sector II: This includes fertiliser plants, which will receive 70% of their average gas consumption of the previous six months, according to the order. However, the govt has stipulated that the fertiliser plants have to furnish certification to the Petroleum Planning and Analysis Cell that it has complied with the order.