The regulation came due to disruptions in global LNG shipments caused by the ongoing West Asia conflict.
The order, notified by the Ministry of Petroleum and Natural Gas in the official gazette on March 9, seeks to ensure equitable distribution and continued availability of natural gas for priority sectors including domestic piped natural gas (PNG), compressed natural gas (CNG) for transport and fertilizer production.
Following the development, shares of major fertiliser companies rallied. Fertilisers and Chemicals Travancore jumped 19.33%, Rashtriya Chemicals and Fertilizers rose 12.55% and National Fertilizers gained 10.72%. Zuari Agro Chemicals advanced 8.21%, Gujarat State Fertilizers and Chemicals climbed 7.8%, Shree Pushkar Chemicals surged 6.36%, Deepak Fertilisers & Petrochemicals Corporation rose 4.69% and Chambal Fertilisers and Chemicals added 4.66%.
According to the government order, gas supply to domestic PNG, CNG for transport, LPG production and essential pipeline operations will receive 100% of their average consumption over the previous six months, subject to operational availability.
Fertiliser plants have been classified under Priority Sector II and will receive 70% of their average natural gas consumption over the past six months. The order also requires fertiliser units to use the gas strictly for fertiliser production.
Industries such as tea processing and other manufacturing units connected to the national gas grid will receive 80% of their average gas consumption over the previous six months, while industrial and commercial consumers supplied through city gas distribution networks will also receive 80% of their previous consumption.
To meet the needs of priority sectors, the government has directed partial or full curtailment of gas supplies to certain non-priority sectors, including petrochemical facilities, high-pressure industrial consumers and power plants. Oil refining companies have also been asked to reduce gas consumption to around 65% of their past six-month average, subject to operational feasibility.
A pooled price mechanism will be used for gas diverted from non-priority sectors to priority sectors.