Fertiliser Crisis: FAI Seeks Govt Relief

New Delhi, Mar 23 (PTI) Fertiliser Association of India (FAI) has urged the government to provide financial relief to urea producers hit by gas supply disruptions, warning that production shortfalls and a separate packaging materials crunch could disrupt fertiliser supplies ahead of the crucial kharif season.

In a letter to the government, FAI called for energy cost reimbursements and penalty waivers for plants operating under constrained gas supplies, citing extraordinary circumstances stemming from the ongoing geopolitical crisis.

Fertiliser plants are classified under Priority Sector-2 in the Natural Gas Supply Regulation Order notified on March 9, 2026, which allocates them 70 per cent of their six-month average consumption.

FAI said the restriction was squeezing production at plants operating under the New Urea Policy 2025, modified NPS III and NIP 2012 frameworks.


The industry body sought the government to recognise actual energy consumption or applicable energy norms - whichever is higher - during the disruption period.

It also requested exemption or reimbursement of any imbalance penalties levied by gas suppliers, as well as full reimbursement of gas quantities and prices as invoiced during the crisis.

FAI separately flagged what it called an emerging crisis in bagging materials, warning that some domestic polypropylene and high-density polyethylene granule suppliers had curtailed output, threatening the packaging supply chain at fertiliser plants and ports.

"The reduced availability is likely to derail all attempts to smoothly despatch fertilisers... in the crucial inventory build-up season," FAI said, urging granule suppliers to maintain matching supply volumes.

The Kharif sowing season typically begins in June, when demand for urea -- the country's most widely used fertiliser --peaks sharply.