The correct answer is 2 and 3 only.

• The Union Government subsidies the urea manufacturing units.
• For the cost of transportation to facilitate the availability of urea at the same maximum retail price all over the country.
• Also, the Government is subsidizing fertilizers for their availability at reasonable prices for agricultural purposes. Hence statement 1 is not correct.
• Urea (NH₂CONH₂) is produced from ammonia (NH₃) and gaseous carbon dioxide (CO₂) at high pressure and relatively high temperature. Hence statement 2 is correct.
• Sulphur is a by-product of processing natural gas and refining high-sulfur crude oils.
• And Sulphur is a raw material for phosphoric acid fertilizer. Hence statement 3 is correct.

• The Government of India subsidizes fertilizers to ensure that fertilizers are easily available to farmers and the county remains self-sufficient in agriculture.
• The same has been achieved largely by controlling the price of fertilizer and the amount of production
• For example, as per the New Urea Policy of 2015, the government fixes the market price of urea.
• Also, there is a fixed subsidy component as well.
• Similarly, for Phosphorous and Potassium, as per the Nutrient Based Subsidy Scheme of 2010, subsidy is provided based on nutrient content per kg of fertilizer. 
• Fertilizer production uses 1.2% of the world’s total energy out of which 90% is used for ammonia production, which is a key ingredient in the production of nitrogen fertilizers. Ammonia can be produced from natural gas.
• Sulfur is a major by-product of oil refining and gas processing.
• Most crude oil grades contain some sulfur, most of which must be removed during the refining process to meet strict sulfur content limits in refined products.
• Also,Sulphur is used in phosphoric acid fertilizer (There is a process known as 'The Wet Process' for producing the same).