India Ramps Up LNG Imports to Tackle Fertiliser, Power Demand Amid Supply Crisis

India has raised spot LNG purchases ahead of the monsoon cropping season as fertiliser manufacturers increase production of urea, as per The Bloomberg reports.  

Natural gas is the main raw material used in urea production, with demand typically rising during June and July when farmers begin sowing rice and other crops. 

As per the report, India is now buying close to 6 spot LNG cargoes a month for fertiliser production, compared with fewer than 1 cargo before the recent supply disruptions in the Middle East. 

State Firms Return to Spot Market 

Several state-owned companies, including Indian Oil Corp. and Gujarat State Petroleum Corp., have sought LNG cargoes for June and July for delivery during the week.  

The purchases follow a slowdown in spot buying during March and April, when higher global prices made imports more expensive. 

The additional buying is also intended to replace supplies affected by disruptions from Qatar and the United Arab Emirates, which together accounted for around 57% of India's LNG imports before the conflict. 

Power and Household Gas Consumption 

Gas demand has also increased from the power sector as high temperatures lifted electricity consumption across many states.  

Government data showed gas-fired power generation reached 651 million units in the first week of June, compared with 383 million units during the same period in May. 

At the same time, the expansion of piped natural gas networks has added to consumption. Since March, around 916,000 new household connections have been added, while infrastructure has been completed for another 305,000 consumers.  

India had nearly 17 million residential PNG connections as of 31 March. 

Read More: Centre Extends Anti-Dumping Duty on Aluminium Foil Imports From 4 Countries Till December 15, 2026! 

Conclusion 

Spot LNG prices are currently around $18–$19 per million British thermal units, compared with about $13 under long-term contracts. Despite the higher cost, India has increased purchases to meet seasonal demand and offset supply disruptions. 

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