Govt Revises Surplus Ammonia Policy For Urea Units, Restores Previous Framework

New Delhi, May 28 (KNN) The Department of Fertilizers has withdrawn a recent advisory on surplus ammonia utilisation by urea manufacturers, reverting to the existing policy framework following a clarification from the Ministry of Petroleum and Natural Gas (MoPNG).

The advisory, dated April 18, 2026, had governed the sale and utilisation of surplus ammonia by urea manufacturing units. Its withdrawal follows a clarification issued by the Ministry on May 12, 2026, stating that while pooled natural gas must be used exclusively for urea production, surplus ammonia generated in the process may be handled under the existing policy framework for surplus ammonia from urea plants.

The MoPNG clarification is rooted in the Natural Gas (Supply Regulation) Order, 2026, notified on March 9, 2026, which mandates that natural gas supplied to fertiliser plants be used exclusively for fertiliser production and not diverted for any other purpose.

Existing Directions Remain in Force

While the April advisory stands withdrawn, urea manufacturers have been reminded to continue compliance with the Department's earlier directive of August 6, 2024, under which urea producers were instructed to prioritise the supply of surplus ammonia to Phosphatic and Potassic (P&K) fertiliser manufacturers.

Shortage and Malpractice Concerns

The policy revision follows reported instances of acute ammonia shortages faced by P&K fertiliser manufacturers, along with concerns over supply at unreasonable prices. 

The Department had also noted that certain urea units floated open tenders for sale of surplus ammonia outside the fertiliser sector, in direct violation of the March 2026 supply regulation order.

Directions to Urea Manufacturers

In view of these concerns, the Department of Fertilizers has directed all urea manufacturers that surplus ammonia sales must be restricted to fertiliser production in line with the Natural Gas (Supply Regulation) Order, 2026, prioritised for P&K and NPK (Nitrogen, P&K) fertiliser producers at reasonable prices, and any remaining surplus—beyond supplies to the P&K sector or permitted cold storage use—must be promptly reported. 

It also mandated that any diversion of surplus ammonia to non-fertiliser sectors in violation of rules be reported with full justification.

(KNN Bureau)