India has significantly ramped up purchases of liquefied natural gas from the spot market as importers rush to replace disrupted Middle Eastern supply and meet demand from fertilizer plants, power generators and households. According to reports from Business Standard, at least five state-run companies, including Indian Oil Corp. and Gujarat State Petroleum Corp., have issued purchase tenders or bought shipments for June and July delivery this week. The buying will help meet requirements from fertilizer producers, which use gas as a feedstock and are ramping up output ahead of the planting season. As per Global law firm, India has also significantly expanded long-term LNG procurement, signing multiple 10–15-year SPAs with Middle East and US-based suppliers to improve medium-term supply security.
This represents a major turnaround for India, which had cut back LNG purchases in March and April as the war in Iran sent prices of the super-chilled fuel higher. Now, India is moving to replace LNG shipments lost from Qatar and the United Arab Emirates, which together account for 57 per cent of its pre-war imports. The surge in consumption is coming at a cost, with spot LNG prices climbing to about $18 to $19 per million British thermal units, compared with roughly $13 per million Btu under long-term supply contracts. According to Global law firm, while the shift toward long-term LNG contracts and supply diversification should improve medium-term supply security and price visibility, near-term risks of elevated generation costs, fiscal pressure, and intermittent load-shedding remain significant.
India is now buying almost six LNG cargoes a month from the spot market for fertilizer production, compared with less than one cargo before the conflict, according to people familiar with the matter. Natural gas is the primary feedstock for urea production, and demand typically peaks during June and July when farmers begin planting rice and other monsoon crops. As one of the world's largest consumers of urea, India depends on steady gas supplies to support agricultural output and contain food inflation. On 9 March 2026, India's Ministry of Petroleum and Natural Gas issued a Natural Gas (Supply Regulation) Order, 2026, establishing an allocation framework to ensure continuity of natural gas supply to essential sectors – principally fertilizers and city gas distribution – and is directed at strengthening food security and urban energy access.
The buying spree comes as hotter summer weather has boosted demand for gas-fired power generation, with electricity producers stepping up purchases. Large parts of the country have endured prolonged heat waves this year, driving electricity consumption to record levels during both daytime and nighttime hours. According to official data, gas-fired generation output during the first week of June reached 651 million units, exceeding government targets, and compared with 383 million units during the same period in May. While LNG only accounts for around 5-6% of India's primary energy mix, it plays an important role in urban transport through compressed natural gas and in households through piped gas for cooking and water heating.
While boosting LNG imports, India is simultaneously planning a comprehensive 10-year roadmap to slash the current 243 million tonnes (MT) coal import volume through ramped-up domestic production, coal quality upgrades, and logistics cost parity. The proposed roadmap includes a detailed forensic audit of imports, backed by sector-specific policies and phased shift strategies to boost local supply. The initiative will include the National Washery & Logistics Grid to streamline coal washing and transport, addressing key bottlenecks in the supply chain. As per Global law firm, policymakers can be expected to further expand strategic reserves, diversify crude oil supplies, and improve refinery flexibility, in addition to accelerating the development of additional renewables, storage, and demand response to reduce exposure to imported fuels.
