The Department of Fertilizers withdrew its recent advisory on surplus ammonia utilisation by urea manufacturers and restored the existing policy framework following a clarification issued by the Ministry of Petroleum and Natural Gas (MoPNG). The withdrawn advisory, issued on April 18, 2026, had regulated the sale and utilisation of surplus ammonia generated by urea manufacturing units. However, after reviewing the clarification from MoPNG dated May 12, 2026, the government decided to revert to the earlier policy mechanism governing surplus ammonia management.
MoPNG Clarifies Use of Pooled Natural Gas
The ministry of petroleum and natural gas clarified that pooled natural gas supplied to fertiliser plants must be used exclusively for urea production. At the same time, it stated that surplus ammonia generated during the production process may continue to be managed under the existing surplus ammonia policy applicable to urea plants. The clarification is based on the Natural Gas (Supply Regulation) Order, 2026, notified on March 9, 2026. The regulation mandates that natural gas allocated to fertiliser manufacturers cannot be diverted for non-fertiliser purposes.
Earlier Fertilizer Supply Directions Continue
Although the April 2026 advisory has now been withdrawn, the department of fertilizers has instructed urea manufacturers to continue complying with its earlier directive dated August 6, 2024. Under this directive, urea manufacturers must prioritise the supply of surplus ammonia to Phosphatic and Potassic (P&K) fertiliser manufacturers to support domestic fertiliser production and maintain supply stability.
Ammonia Shortages Triggered Policy Review
The government’s policy revision follows reports of acute ammonia shortages faced by P&K fertiliser manufacturers across the country. Authorities also raised concerns regarding the sale of ammonia at unreasonable prices, which affected raw material availability for the fertiliser sector. In addition, the Department observed that some urea manufacturers had floated open tenders to sell surplus ammonia outside the fertiliser sector. According to the government, such actions directly violated the provisions of the Natural Gas (Supply Regulation) Order, 2026.
Government Issues Fresh Directions to Urea Manufacturers
In response to these concerns, the department of fertilizers has issued fresh operational directions to all urea manufacturers. The Department stated that surplus ammonia sales must remain restricted to fertiliser production activities, supplies should be prioritised for P&K and NPK fertiliser manufacturers, ammonia should be sold at reasonable prices to support the fertiliser industry, and any remaining surplus, beyond P&K sector requirements or permitted cold storage applications, must be immediately reported to authorities The government has directed companies to report any diversion of surplus ammonia to non-fertiliser sectors along with complete justification for such transactions.
Policy Aims to Strengthen Fertilizer Supply Chain
By restoring the earlier surplus ammonia framework, the government aims to improve raw material availability for the fertiliser industry, prevent supply disruptions and ensure better compliance with natural gas allocation rules. As reported by knnindia.co.in, the revised approach is also expected to support balanced ammonia distribution, stabilise fertiliser production and strengthen India’s overall agricultural input supply chain.
