Middle East Conflict Cuts India’s Gas Supply by 40%, Concerns Rise for Fertilizer Industry

The increasing tension between America, Israel and Iran in West Asia (Middle East) has given a direct blow to India's energy and agriculture related sectors. Especially there has been a huge reduction in the supply of LNG (Liquefied Natural Gas), due to which many sectors are being affected. The government is monitoring the situation and looking for alternative ways.

Has war affected India's gas supply?

There has been a reduction of 30 to 40 percent in the supply of LNG coming from Qatar. Qatar is India's largest supplier, providing about 40-45 percent of our total LNG. Many tankers are unable to reach the region due to recent attacks and the halt in shipping in the Strait of Hormuz. Petronet LNG declared force majeure, after which companies like GAIL are supplying less gas to industry and city.

What can be the impact on fertilizer production?

LNG is very important for fertilizer factories, especially for making urea. Due to lack of gas in many urea plants, production can reduce by up to 40 percent. Three-four big plants are already running low. If this shortage continues for a long time, domestic urea will be produced less and imports may become expensive. More than 40 percent of urea and phosphate fertilizers come to India from the Middle East, so due to the disturbance there, prices are also increasing.

What is the government planning to deal with this situation?

The government is preparing to distribute the use of gas on the basis of priority. The fertilizer sector can be kept at the top so that the needs of the farmers are not affected. Also, alternative supplies are being sought from Russia, Australia or Africa. There is also talk of purchasing expensive gas from the spot market. Officials are saying that at present the stock is fine, but if the problem persists for a long time, the challenges will increase.

Will farmers face shortage of fertilizers?

Officials are saying that the stock of fertilizer is sufficient for the Kharif season (starting from June), there is no need for farmers to panic. But if the war prolongs and the supply chain deteriorates, prices may rise and shortages may occur. Prices of Urea and DAP are already going up.

Why is West Asia so important for India?

India takes a major part of its energy and fertilizers from this area. Things like crude oil, LNG, urea, sulfur come from here. A large part of the world's oil and gas passes through the Strait of Hormuz, so any blockage here directly affects India's economy and agriculture. In 2025, India will import goods worth $98 billion from this region, of which energy and fertilizers will have the largest share.

Overall, the government is making every effort to minimize the impact on farmers and the common man. But if the tension continues for months, inflation may increase due to costlier energy and agriculture will also come under pressure. Everyone's eyes are on the situation.