India’s demand for natural gas could nearly double by 2030 if progress remains steady, policies are supportive, and investments continue to grow, Petroleum and Natural Gas Regulatory Board (PNGRB) chairperson Anil Kumar Jain said on Wednesday.
Jain, who was speaking to reporters on the sidelines of the second PNGRB national conclave on natural gas and petroleum products infrastructure in Gandhinagar, said the City Gas Distribution (CGD) network was expected to drive this growth.
“Currently, India consumes 190 million metric standard cubic metres per day (MMSCMD) of natural gas. Based on current global and domestic trends, this is projected to rise to 297 MMSCMD by 2030. However, if conditions are favorable, the demand could grow even further to 365 MMSCMD,” he added.
Jain said PNGRB has granted licences through a bidding process to expand the CGD network, with a goal of setting up 17,000 CNG stations and providing 12 crore domestic pipeline connections by 2030. The board, which regulates various aspects of the petroleum and natural gas industry, is working to expand pipeline infrastructure.
PNGRB is a statutory body mandated to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas.
“Currently, 10,000 km of natural gas pipelines have been approved for cross country networks, requiring an investment of ₹40,000-50,000 crore over the next three to five years. Additionally, ₹30,000 crore has been committed to city gas distribution infrastructure, with ₹400 crore allocated per district,” he said.
However, there are challenges to natural gas adoption. Jain pointed out that gas prices were beyond PNGRB’s control and that the exclusion of natural gas from the Goods and Services Tax (GST) regime adds further complexity. He urged states to consider tax reductions, given that natural gas is a cleaner fuel option.
The sector has shown steady growth, with city gas distribution expanding at a 12% compound annual growth rate (CAGR) between 2015-16 and 2023-24. Similarly, use of natural gas in the industrial segment has grown 12.7% CAGR in this period.
The CGD network bidding process focuses on three main targets: the number of CNG stations to be set up, the number of households to be connected to domestic pipelines, and the total length of gas pipelines to be installed in cities and districts. Companies awarded bids in 2023 have seven years to achieve these targets.
High infrastructure costs pose a significant barrier, with pipeline connection expenses in some areas reaching 32,000 rupees per household, he said. India currently imports nearly half of its gas needs as liquefied natural gas, which follows global pricing norms.
“We need to have a shift in our perspectives where we need to start regarding the pipeline infrastructure as Profit Centres rather than Cost Centres. Past few years have proved India’s capability to build world class oil, gas and petroleum infrastructure while keeping sustainable development growth goals in mind,” Jain said while speaking at the conclave.
