India’s natural gas consumption is to rise nearly 60% by 2030, driven by robust growth in the City Gas Distribution (CGD) sector and increasing demand across transport, cooking, and industrial applications.
According to a new study by the Petroleum and Natural Gas Regulatory Board (PNGRB), daily gas usage could grow from 188 million standard cubic meters per day (mmscmd) in FY24 to 297 mmscmd by 2030 under the ‘Good-to-Go’ scenario.
This base-case scenario assumes moderate economic expansion and continued policy momentum aligned with existing government targets.
Looking ahead to 2040, consumption could climb further to 496 mmscmd, underscoring natural gas’s expanding role in India’s energy mix.
Under a more ambitious ‘Good-to-Best’ scenario—factoring in accelerated reforms, higher investments, and stronger demand the report estimates gas consumption could soar to 365 mmscmd by 2030 and 630 mmscmd by 2040.
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The CGD sector, which includes CNG supply for vehicles and piped natural gas (PNG) for households and businesses, is likely to be the single largest driver of this demand surge.
It will likely contribute 50 mmscmd of the 110 mmscmd incremental demand by 2030 and 129 mmscmd out of the 198 mmscmd rise between 2030 and 2040 in the moderate growth scenario.
“The CGD sector is likely to be the primary growth driver, with consumption likely to grow 2.5 to 3.5 times by 2030 and 6 to 7 times by 2040,” the report stated.
The Indian government is aiming to increase the share of natural gas in the energy mix to 15% by 2030, up from the current 6–6.5%, in a strategic move toward cleaner energy and net-zero emissions by 2070.
To support this, the PNGRB has granted city gas licenses in 307 geographical areas (GAs), significantly expanding India’s gas infrastructure across urban and rural regions.
Beyond CGD, the refining and petrochemical industries are likely to fuel further growth in gas usage.
The sector will drive an additional demand of 21 mmscmd by 2030 and add another 10 mmscmd by 2040, fueled by the growing focus on petrochemical integration.
Meanwhile, sectors like power generation and fertilizers will likely post moderate growth, as they already operate at high consumption levels.
However, the transition to cleaner fuels is likely to sustain gas relevance in these segments.
India currently imports about half of its natural gas needs, and this reliance is set to grow significantly as domestic production fails to keep pace with the expected surge in demand.
Liquefied Natural Gas (LNG) imports are expected to more than double by 2030, making long-term supply deals increasingly vital for energy security.
The report highlights LNG’s transformative potential in India’s long-haul transport sector.
It notes that LNG could substantially replace diesel, with trucking applications expected to gain traction post-2030.
“LNG as a long-haul transportation fuel could be a game changer. With the potential to emulate China’s success in reducing diesel dependency,” the report added, as quoted by PTI.
With global LNG supply projected to expand, India may find opportunities to secure long-term contracts at more competitive rates, especially if it leverages current trends.
Despite the encouraging projections, the PNGRB cautioned that India’s gas future depends on continued policy support, infrastructure expansion, and favorable global pricing.
“Achieving India’s projected natural gas targets for 2030 and 2040 will require a sustained commitment from stakeholders. However, risks like geopolitical instability, price volatility, and policy uncertainty must not be overlooked,” the report warned.
Between 2015-16 and 2023-24, India’s natural gas consumption jumped 45%, growing from 131 mmscmd to 188 mmscmd.
While power sector demand slightly dipped due to price sensitivity, the CGD sector more than doubled, registering a compound annual growth rate (CAGR) of 12%.
The fertilizer sector saw a 3.4% annual rise, while refineries grew at 1.8% annually.
These trends underscore the evolving energy landscape and India’s growing reliance on natural gas as a bridge fuel in its clean energy transition.
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