Amidst West Asia crisis, India purchased natural gas at $19/unit from spot markets for fertiliser units
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims + Mains·
Why in news
The Indian government reported a surge in spot prices for liquefied natural gas (LNG) to $19/MMBtu due to the West Asia crisis, impacting fertilizer production costs.
Background
Spot prices for LNG used in fertilizer production rose from a pre-war price of $11/MMBtu to $19/MMBtu. To counter supply concerns, the government is augmenting gas supply to urea plants, increasing production to 12,000-15,000 tonnes per day.
Facts for Prelims
- FactLNG spot price increase: From $11/MMBtu (pre-war) to $19/MMBtu (current).
- FactUrea production target: 12,000-15,000 tonnes per day.
- FactKey raw material suppliers: Russia, Morocco, Australia, Indonesia, Malaysia, Jordan, Canada, Algeria, Egypt, Finland, and Togo.
For Mains
Q. Analyze the impact of global geopolitical conflicts on India's domestic fertilizer production and food security. Suggest measures to mitigate input cost volatility.
Dimensions to cover in your answer
- Input cost volatility: Sharp rise in LNG and ammonia prices squeezing profit margins of domestic fertilizer units.
- Supply chain diversification: Reducing reliance on single-source regions by securing raw materials from diverse global partners.
- Food security trade-off: Balancing high production costs of urea with the necessity of maintaining affordable fertilizer for farmers.
Keywords: Input cost volatility · Supply chain diversification · Food security · Geopolitical risk · Fertilizer production
More Economy notes
- ISM 2.0 will support setting up of facility for chemicals, gases, equipment manufacturing in India: Senior MeitY official · 6 April 2026
- Gulf war batters India’s glass heartland, testing New Delhi’s manufacturing drive · 6 April 2026
- RBL Bank shares jump 4% after exceptional Q4 update, RBI’s approval for Emirates NBD’s 74% stake acquisition · 6 April 2026
- RBI may keep rates unchanged, focus on rupee stability and bond yields · 6 April 2026
- Experts predict a 20% drop in Kerala's annual remittances due to the ongoing West Asia war, threatening the state's remittance-dependent economy · 6 April 2026
- Bank stocks’ $95 billion rout may deepen on macro risks · 6 April 2026
Something wrong, or something missing?
Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.
This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.