Fertiliser majors waiting to make investments in new urea plants have reasons to cheer as the government has promised, subject to a ceiling, it would cover the additional cost from natural gas imports given the paucity of domestic gas.

Currently, the Asian spot price of the feedstock, which forms over three-fourths of the cost of production of fertilisers, is $14 per million metric British thermal unit (mmBtu), while the domestic gas is priced at $4.2/mmBtu. The government has said it would bear the difference in costs arising out of the fertiliser companies importing gas to meet their needs, to the extent the imported gas price is below $14/mmBtu.