India's urea plants are running at half capacity after force majeure declarations disrupted LNG flows through the Strait of Hormuz amid escalating West Asia tensions, industry sources said on Sunday. The move triggered supply curtailments by state-owned gas distributors GAIL (India) Ltd, Indian Oil Corporation Ltd (IOC) and Bharat Petroleum Corporation Ltd (BPCL), which supply gas under RasGas contracts to fertiliser units across the country. Several plants, sources said, were compelled to overdraw gas allocations momentarily to keep operations within safe parameters. GAIL informed fertiliser companies by letter dated March 15 that long-term RLNG quantities would henceforth be invoiced at multiple price points, including contract price, GAIL Pooled Price and Gazette Pooled Price, effective March 1, 2026. The pooled price, sources noted, is provisional and subject to retrospective reconciliation under applicable government guidelines, introducing an additional layer of financial uncertainty for producers already absorbing production losses.

Source: The Telegraph March 22, 2026 09:11 UTC