New Delhi: Amid the global race to secure energy supplies, natural gas (LNG) prices almost doubled to $19-20 per metric million Btu (MMBtu) from around $10-12 per unit before the West Asian conflict as Indian agencies bought in the spot market this week.The escalation comes in the wake of Iran’s targeting of key suppliers, such as the massive Ras Laffan facility in Qatar. QatarEnergy cut off supplies from its facility last week, increasing pressure after Iran closed the Strait of Hormuz.While the government responded by reprioritizing gas availability, it also began spot purchasing to ensure availability for critical industries such as fertilizers, where supplies had fallen by an average of 70%. So far, it has purchased 7.3 metric standard cubic meters per day (mmscmd) mainly for urea, while the industry has an additional gas demand of 8.6 mmscmd. While some units are under maintenance in the lean season, purchases have been brought forward to meet this month’s demand. Officials said this will help produce additional 12,500-13,000 tonnes of urea per day by the end of the month. Against the average production of 25 lakh tonnes, the government estimates the production to be around 17 lakh tonnes.“Due to the war, spot prices of LNG have increased. Earlier, when spot purchases were made for the fertilizer sector, the price was lower than long-term contracts,” an official said. Industry insiders and officials said that more than price, the government is now concerned about increasing availability for the Kharif season and building stocks for the Rabi sowing season.
