India’s energy landscape is set to undergo a major transformation as natural gas emerges as a key transition fuel in its journey toward a cleaner energy future. According to a detailed study by the Petroleum and Natural Gas Regulatory Board (PNGRB), India’s natural gas consumption is projected to surge by nearly 60% by 2030, reaching 297 million standard cubic metres per day (mmscmd) from 188 mmscmd recorded in FY24.

This expected increase highlights the growing importance of gas in multiple sectors, from transportation and residential usage to industrial and energy production.

CGD to be the Anchor of Growth

A key driver behind this surge is the City Gas Distribution (CGD) segment, which supplies Compressed Natural Gas (CNG) for vehicles and Piped Natural Gas (PNG) for households and industries. As per the report:

• CGD is expected to add 50 mmscmd out of the total 110 mmscmd incremental demand by 2030.

• It will further contribute 129 mmscmd of the 198 mmscmd incremental demand between 2030 and 2040.

• From a base of 37 mmscmd in FY24, CGD consumption is forecasted to grow 2.5 to 3.5 times by 2030, and up to seven times beyond 2040.

This rapid expansion in CGD infrastructure is part of India’s broader commitment to improving urban air quality and offering cleaner fuel alternatives, especially in high-pollution urban zones.

Scenario-Based Projections: Good-to-Go vs Good-to-Best

The PNGRB report presents two possible growth trajectories for India’s natural gas future:

• Under a ‘Good-to-Go’ scenario, which assumes moderate policy progress and infrastructure expansion, India’s natural gas consumption could reach 496 mmscmd by 2040.

• In a more optimistic ‘Good-to-Best’ scenario, which assumes aggressive policy reforms and investment, the country could see 365 mmscmd usage by 2030 and a whopping 630 mmscmd by 2040.

These scenarios indicate that government intervention, infrastructure development, and international energy pricing will significantly shape India’s natural gas future.

Role of Other Key Sectors

While CGD is expected to play the lead role, other sectors will also add to demand:

• The petrochemical and refinery sectors are projected to add 21 mmscmd by 2030 and 10 mmscmd more by 2040.

• Power and fertiliser industries are anticipated to grow at a more moderate pace but will remain essential to the overall energy mix.

This sectoral diversification reflects the adaptability of natural gas in both base-load power generation and as an industrial feedstock.

Doubling LNG Imports: A Strategic Move

With domestic natural gas production lagging behind growing consumption, India currently imports around 50% of its gas needs. To match the rising demand:

• The country is likely to double its Liquefied Natural Gas (LNG) imports by 2030.

• LNG will also emerge as a long-haul transport fuel post-2030, helping reduce diesel dependence—a strategy already successful in China’s energy model.

However, the successful adoption of LNG for transport will require:

• Significant investment in LNG refuelling stations and vehicles.

• Policy frameworks that encourage fleet conversion and industrial uptake.

• Stable global LNG prices, which remain a key variable in ensuring affordability.

Infrastructure and Policy: Enablers of Growth

Reaching these ambitious targets will depend on:

• Accelerated investments in pipeline infrastructure, LNG terminals, and CGD networks.

• Policy support including tax incentives, subsidies, and long-term import contracts.

• Ensuring supply security through diversified sourcing and domestic exploration.

The natural gas pipeline network, including the Jagdishpur–Haldia–Bokaro–Dhamra pipeline (Urja Ganga) and others under the National Gas Grid, will be instrumental in delivering energy to underserved regions.

India’s Clean Energy Transition

As India targets net-zero emissions by 2070, the transition to gas will serve as a bridge between coal-dominant present and renewable-led future. Natural gas is cleaner than coal and oil, emits less carbon dioxide per unit of energy, and can be a reliable backup for intermittent renewable energy sources like solar and wind.

Already, natural gas consumption in India has grown by 45% from 131 mmscmd in FY16 to 188 mmscmd in FY24. This momentum signals growing investor confidence and increasing consumer adoption.

Conclusion

India’s natural gas future appears robust, driven by rising demand across key sectors, strategic LNG imports, and the government’s clean energy goals. The City Gas Distribution sector is poised to be the engine of growth, while broader policy support and infrastructure will determine the pace of expansion.

To sustain this momentum, India must continue to invest in both physical infrastructure and policy frameworks, ensuring that gas remains an accessible, affordable, and clean energy source for the decades to come.

The Upcoming IPOs in this week and coming weeks are Aten Papers & Foam.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.