By Sadananda Mohapatra, Senior Business Journalist
Lead Story: India Secures Fertiliser Lifeline as West Asia Tensions Return
Tensions in West Asia flared again in late August, putting fresh pressure on India’s natural gas supply lines at a moment when the Kharif sowing season was still running and urea demand remained high. The disruption was real, but the damage was contained.
India’s response rested on two parallel moves that have now become familiar tools in its energy crisis playbook.
The first was a sharp increase in liquefied natural gas imports. August volumes reached approximately 2.6 million tonnes, the highest monthly figure in nearly six years. The United States led the new supply mix, joined by Nigeria, Oman and Angola, all non-Gulf sources routed entirely outside the Strait of Hormuz. The gas arrived at spot prices of between USD 19 and USD 21 per million British thermal units, roughly double pre-crisis levels. The government accepted that cost rather than allow it to flow through to urea plants or farmers.
Priority allocation rules channelled much of this imported gas directly to fertiliser production. Earlier in the year, allocations to urea plants had fallen to around 65 to 70% of normal levels, cutting domestic output sharply. By mid-year the situation had recovered. Gas supplies returned close to full average requirements and urea production exceeded targets in several official assessments through April to June.
The second move was on fertiliser imports themselves. India ran large-scale urea procurement from a diversified supplier base through August. The most consequential development was China. After Beijing eased export restrictions, Chinese suppliers are expected to account for the bulk of at least 1.2 million tonnes of urea in the most recent tender, joining earlier cargoes from Oman, Russia and Egypt. The China supply is significant not just in volume but in signal: India used every available source, setting aside any diplomatic hesitation, to protect its farm sector.
The stock position reflects this effort. Kharif 2026 fertiliser requirements were reassessed at around 38.4 million tonnes. Available stocks through July and August consistently held in the 40 to 50% range of seasonal need, well above the conventional 33% prepositioning benchmark.
The strategy has not been without cost. Higher LNG prices and elevated global urea rates are pushing the fertiliser subsidy bill well beyond original budget estimates. But physical availability, gas for plants and fertiliser for farmers, has been protected throughout.
India has converted geopolitical pressure into a managed, if expensive, buffer. Diversified LNG sourcing, priority gas allocation rules and opportunistic urea imports including from China have given the system a resilience that the crisis was designed to test. So far the numbers support the claim that supply held.
Joules Capsule: Weekly Round-Up
India Raises Commercial Gas and Jet Fuel Prices as Import Costs Bite
India’s state-owned oil companies raised the price of commercial LPG cylinders by Rs 9.50 per 19-kilogram cylinder from September 1, while aviation turbine fuel prices rose 5.46% to Rs 121.28 per litre, marking the second consecutive monthly increase for jet fuel. In Delhi, CNG prices were hiked by Rs 3.89 per kilogram from August 29, taking rates to Rs 86.98 per kilogram, following four earlier instalments of increases through May. Mumbai’s city gas distributor raised CNG by Rs 2 per kilogram to Rs 88 and domestic piped natural gas by Rs 1 per standard cubic metre, explicitly citing higher imported gas costs linked to the West Asia crisis. Household LPG cylinder prices remain unchanged for now, a deliberate political choice with the subsidy bill rising sharply in the background. The cumulative direction is clear: imported gas costs are working their way through India’s domestic energy prices, one category at a time.
Modi and Putin Reaffirm Energy and Fertiliser Ties at SCO Summit
Prime Minister Modi met President Putin on the sidelines of the Shanghai Cooperation Organisation summit in Bishkek, Kyrgyzstan, with energy security and fertiliser supply featuring prominently on the agenda. Russia assured India it would continue supplying energy and fertilisers despite disruptions linked to the conflict in West Asia, and said it was increasing fertiliser supplies to India with preparedness to further increase shipments to support Indian agriculture. The meeting also covered trade, defence and broader bilateral cooperation. Nuclear energy, fertiliser plants and high-tech cooperation emerged as key areas for future India-Russia partnership. For India, the Bishkek assurances add another layer to the diversified supply network it has been building since the West Asia crisis began.
India Steps In as Nepal’s Floods Knock Out 550 MW of Power
Flash floods in the Trishuli and Lhende Khola river basin on August 26 caused severe damage to hydropower infrastructure in Nepal, cutting approximately 550 megawatts of generation capacity from the national grid. Hydropower contributes more than 90% of Nepal’s approximately 4,300 megawatt generation capacity, making the damage particularly significant. India has stepped in, offering to supply any additional power Nepal needs on an advance approval basis from September 2026. Indian power ministry officials confirmed the impact on India’s own grid is minimal and fully manageable. The episode underlines both the fragility of Nepal’s hydro-dependent power system and the deepening energy interdependence between the two neighbours.
India Extends Coal Supply Bridge for Key Power Plants
India’s coal linkage committee has approved one-year extensions of bridge coal supplies on a tapering basis for several thermal power units whose captive mines have yet to reach full production. Maharashtra State Power Generation Company’s plants at Koradi, Chandrapur and Parli, totalling over 3,000 megawatts of combined capacity, received continued supply approvals as their linked Gare Palma coal block faces ongoing land and development delays. NTPC’s Barauni plant in Bihar secured a similar extension, with its associated Badam coal block cleared for mining but held back by land acquisition and local constraints. The extensions prevent generation losses at operating plants while captive mines ramp up, but the recurring need for bridge supplies points to a persistent gap between India’s coal block allocation policy and actual mine production timelines.
About the Author:
Sadananda Mohapatra is a veteran business journalist with decades of experience covering India’s emergy, industry, and economic landscape. With stints at reputed financial news publications like The Business Standard & NewsWire18, he reported extensively on India’s power sector, minerals policy, coal and energy regulation, and industrial developments — building a deep, ground-level understanding of the global energy economy. His work spans corporate affairs, infrastructure, and policy analysis, with a particular focus on eastern India’s resource-rich industrial corridor. He currently writes on the global energy landscape through his newsletter, The Joule’s Stack.
