New Delhi, March 10 Fertilizer stocks were in the spotlight on Tuesday, with Rashtriya Chemicals and Fertilizers surging over 16 per cent, following the government's prioritization of gas allocation to the sector.
Shares of Rashtriya Chemicals and Fertilizers rose by 16.18 per cent, National Fertilizers rose by 13.38 per cent, Deepak Fertilisers & Petrochemicals Corporation climbed by 4.86 per cent, Paradeep Phosphates jumped by 4.84 per cent, Chambal Fertilisers rallied by 4.62 per cent, and Coromandel International went up by 3.87 per cent on the BSE.
"Fertilizer stocks advanced after the government prioritized gas allocation to the sector," said Vinod Nair, Head of Research, Geojit Investments Ltd.
In the equity market, the 30-share BSE Sensex jumped 639.82 points or 0.82 per cent to settle at 78,205.98, halting its two-day sharp decline. The 50-share NSE Nifty climbed 233.55 points or 0.97 per cent to end at 24,261.60.
As the widening conflict in West Asia disrupted 30 per cent of India's gas supply, the oil ministry, in a gazette notification, ordered available gas to be diverted from non-priority sectors to key users.
India meets half of its 191 million standard cubic metres per day (mmscmd) of gas consumption through imports. With the disruption of tanker movement through the Strait of Hormuz, about 60 mmscmd gas from the Middle East has been disrupted.
The remaining liquefied natural gas (LNG) has been reprioritized to meet 100 per cent of the demand for LPG production, CNG, and piped cooking gas (PNG), 80 per cent of commercial users of the fuel, and 70 per cent of fertilizer unit needs.
According to the gazette notification issued late on Monday, the latest order – issued under the Essential Commodities Act of 1955 – will override all outstanding contracts and other commercial arrangements for the sale of LNG.
The supply of natural gas to the domestic piped natural gas grid, CNG for transport, and LPG production shall be treated as a priority allocation. They will be supplied 100 per cent of their average past six months' gas consumption, the notification said.
Behind this is the fertilizer sector, which is in second place, with at least 70 per cent of its past six months' demand being met.
Following US-Israeli strikes inside Iran and Tehran's sweeping retaliation across the region, maritime traffic through the Strait of Hormuz has sharply declined, insurance premiums have surged, and energy markets have responded with immediate volatility.