RCF, FACT and other fertiliser stocks rocket up to 17%. What’s triggering the surge?

Shares of fertiliser companies such as Fertiliser and Chemical Travencore (FACT), Chambal Fertiliser, Rashtriya Chemical Fertiliser (RCF), National Fertilisers, among others, rallied up to 17% on Tuesday after the government issued the Natural Gas Regulation Order, 2026.

Under the order, natural gas supply to fertiliser plants will be capped at 70% of their average consumption over the past six months. It also specifies that the gas allocated to these units cannot be used for any purpose other than fertiliser production.

Natural gas plays a critical role for fertiliser companies as a majority of it is used as feedstock in the production of ammonia, which is the primary input required to manufacture urea. Apart from this, gas is also used to generate the extreme heat and high-pressure environment required for the chemical reactions involved in the manufacturing process.

The directive comes amid the ongoing conflict in West Asia, which has disrupted liquefied natural gas (LNG) shipments passing through the Strait of Hormuz. With key suppliers invoking force majeure, the government has ordered a diversion of natural gas supplies toward priority sectors of the economy.

The order has been issued under the Natural Gas (Supply Regulation) Order, 2026, which derives its authority from the Essential Commodities Act, 1955. The law empowers the Centre to regulate the supply, distribution and trade of petroleum products to ensure equitable distribution.

Last week, Gujarat Gas and Petronet LNG invoked force majeure for their industrial customers under the provisions of their Gas Supply Agreements, restricting the daily contracted quantity.
According to the order, four sectors have been assigned the highest priority and will continue to receive 100% of their average gas consumption over the past six months.These sectors include domestic piped natural gas (PNG), compressed natural gas (CNG) used in transport, liquefied petroleum gas (LPG) production, including shrinkage requirements, as well as pipeline compressor fuel and other essential operational needs.

Fertiliser plants have been placed in the second priority category and will receive 70% of their average gas consumption over the past six months, subject to operational availability.

The third priority category includes tea industries, manufacturing units and other industrial consumers connected to the national gas grid, which will receive 80% of their average consumption during the past six months.

The fourth priority group covers industrial and commercial consumers served by city gas distribution (CGD) companies, who will also receive 80% of their average gas consumption over the previous six months.

FACT shares rallied the most, gaining 17%, while RCF and National Fertilisers soared 12% each. Gujarat State Fertilisers and Coromandel International gained up to 6%. Paradeep Phosphates and Chambal also rose to 6%.

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