Gas procurement policy tweaked to bring down cost of fertilisers

The government has modified the gas procurement policy for fertiliser companies, allowing them to buy about a fifth of their monthly needs from the spot market.

With the revision, fertiliser companies will also have to buy 40% of their supplies under a “take or pay” rule, while no such guaranteed offtake is part of the current norms.

As per the extant guidelines, fertiliser plants are required to procure 80% of their gas needs through long-term contracts and the balance through three-month tenders.