Shares of fertilizer companies in India surged by up to 17% on March 10 following the government's issuance of the Natural Gas Regulation Order, 2026. The order, invoked under the Essential Commodities Act, 1955, aims to regulate the supply and distribution of natural gas, which is critical for fertilizer production.
The government has prioritized sectors such as domestic PNG, CNG for transport, LPG production, and fertilizer plants. Specifically, the natural gas supply to fertilizer plants has been capped at 70% of the average supply over the last six months. This measure is intended to ensure equitable distribution of natural gas across essential industries.
Despite the regulatory intervention, India's fertilizer reserves have shown a significant increase, rising by 36.5% year-on-year. The rise in stock prices reflects investor confidence in the sector's stability and growth potential, even amidst regulatory changes.