India Set to Double Natural Gas Usage by 2040, Says Regulatory Study
A fresh projection by PNGRB highlights a sharp rise in gas demand, fueled by cleaner energy adoption in vehicles, homes, and industrial sectors.
India’s Natural Gas Outlook: A Decade of Rapid Growth Ahead
India is poised for a significant leap in natural gas usage over the next two decades, according to a fresh assessment from the Petroleum and Natural Gas Regulatory Board (PNGRB). The study anticipates that the country’s daily gas consumption will increase by nearly 60% by 2030 and more than double by 2040 compared to current levels.
This anticipated rise is closely tied to expanded adoption of compressed natural gas (CNG) for transportation, greater household usage through piped gas networks, and increased reliance on gas across various industrial processes.
Projected Demand: A Look at the Numbers
According to a recent assessment by the Petroleum and Natural Gas Regulatory Board (PNGRB), India is utilizing approximately 187 million standard cubic metres of natural gas each day during the fiscal year 2023–24. Under the ‘Good-to-Go’ scenario — which presumes stable growth in line with existing policies and trends — demand is forecasted to reach 297 mmscmd by 2030. The upward trajectory is expected to persist through the next decade, with daily natural gas usage anticipated to reach 496 million standard cubic metres by the year 2040.
In a more optimistic scenario dubbed ‘Good-to-Best’, which factors in accelerated reforms, improved policy execution, and greater investments, the demand outlook is even stronger — growing to 365 mmscmd by 2030 and soaring to 630 mmscmd by 2040.
Clean, Affordable, and Growing: Why Gas is Gaining Ground
The report emphasizes that natural gas stands out as a clean, economical, and practical energy source when compared to other fossil fuels. As India’s overall energy requirements continue to climb, natural gas is being positioned as a key transitional fuel, especially important in the country’s journey towards its net-zero emission target by 2070.
The government has set a goal to raise the share of natural gas in the national energy mix to 15% by 2030 — more than double the current share of approximately 7%. This effort supports India’s shift from high-emission fuels to more sustainable options.
City Gas Distribution to Lead the Demand Curve
City Gas Distribution (CGD), which includes supplying CNG to vehicles and piping gas into residential kitchens and industrial units, is expected to be the biggest growth driver. The sector currently consumes around 37 mmscmd, but this is projected to rise significantly, hitting over 87 mmscmd by 2030.
By that time, CGD is forecasted to overtake the fertilizer sector to become the largest consumer of natural gas, contributing nearly 29% to total demand in 2030 and a substantial 44% by 2040.
Sectoral Trends: Fertilizer, Power, and Refining
While CGD will see the sharpest growth, other sectors are expected to show moderate increases. At present, the fertilizer sector stands as the top consumer of natural gas, using 58 million standard cubic metres daily—a figure anticipated to climb to 65.3 mmscmd by 2030 and further to 72.9 mmscmd by 2040. However, with no major new fertilizer plants planned in the near future, this growth will be gradual.
Natural gas usage in electricity generation is forecast to expand from the present level of 25.2 million standard cubic metres per day to 35.7 mmscmd by 2030, reaching 43.5 mmscmd by 2040. Meanwhile, refineries and petrochemical industries are also on track for a sharp uptick in demand—rising from 22 mmscmd currently to 43.3 mmscmd by 2030—fueled by a growing focus on integrating petrochemical operations.
LNG to Play a Critical Role in Bridging Demand
As India’s domestic gas production may not keep pace with the accelerating demand, the country is expected to lean heavily on imports of liquefied natural gas (LNG). The report indicates that LNG imports will more than double by 2030 to close the demand-supply gap.
Post-2030, LNG is also expected to carve a niche in the long-haul transport sector. With the potential to significantly reduce dependence on diesel, LNG trucks may follow a growth trajectory similar to that of China’s success in reducing diesel reliance. Emerging global LNG supply dynamics indicate promising prospects for securing extended-term agreements and maintaining steady pricing over time.
Final Thoughts
India’s energy landscape is set for a major transformation, with natural gas emerging as a key player in the country’s transition to cleaner fuels. Backed by favorable policies, rising urban demand, and strong industrial uptake, gas consumption is projected to increase substantially over the next 15 years.
As city gas networks drive demand and LNG fills the shortfall, natural gas is poised to play a central role in advancing India’s transition to cleaner energy. Moderate expansion in the fertilizer, power, and refining sectors further supports this upward trajectory.
The PNGRB study outlines a clear path: if policies remain supportive and investments continue to flow, India can look forward to a robust, gas-powered future that aligns with its environmental commitments and growing energy needs.
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The image added is for representation purposes only
