Amid attacks, gas prices spike as countries look to secure supplies

NEW DELHI: Amid the global rush to secure energy supplies, Indian agencies have seen the cost of natural gas (LNG) nearly double from around $10-12 a unit before the West Asian conflict to $19-20 per metric million Btu (MMBtu) when they made purchases in the spot market this week.

The spike comes in the wake of critical suppliers such as the massive Ras Laffan facility in Qatar being targeted by Iran. QatarEnergy had last week shut down supplies from its facility, adding to the pressure after the Strait of Hormuz was shut down by Iran.




While govt responded by reprioritising gas availability, it also began spot purchases to ensure availability for critical industries such as fertiliser, where supply was cut to 70% of the average. So far, it has purchased 7.3 metric standard cubic metres per day (MMSCMD), mainly for urea, against an industry demand for 8.6 MMSCMD of additional gas. While some of the units are under maintenance in the lean season, the purchases have been advanced to meet this month's demand. This will help produce additional 12,500-13,000 tonnes of urea daily till month end, said officials. Against an average production of 25 lakh tonnes, govt estimates production at around 17 lakh tonnes.

"Because of war, there's a spike in spot prices of LNG. Earlier, when spot buying was done for the fertiliser sector, the price was less than that of long-term contracts," said an official. Industry insiders and officials said more than price, govt is now concerned about upping availability for the kharif season and building stock for the rabi sowing season.

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