India’s natural gas demand to double by 2040

India’s natural gas consumption is projected to rise by 60% by 2030 and double by 2040, according to a PNGRB study. The growth will be fuelled by greater use of CNG in vehicles, piped gas for households, and industrial applications. City gas distribution is expected to become the leading demand sector by 2030, overtaking fertilizer.

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India’s natural gas consumption is expected to grow substantially, increasing by nearly 60% by 2030 and more than doubling by 2040, according to a study by the Petroleum and Natural Gas Regulatory Board (PNGRB). This surge will be primarily driven by expanded use in city gas distribution (CGD), which includes compressed natural gas (CNG) for vehicles and piped natural gas for households and industries.

Under the ‘Good-to-Go’ scenario, which assumes moderate growth aligned with current trends and policy commitments, natural gas demand is projected to rise from 187 million standard cubic metres per day (mmscmd) in 2023–24 to 297 mmscmd by 2030 and 496 mmscmd by 2040. In a more optimistic ‘Good to Best’ scenario, which envisions faster policy support and higher investments, consumption could reach 365 mmscmd by 2030 and 630 mmscmd by 2040.

City gas distribution is set to emerge as the dominant growth driver, contributing 50 mmscmd out of the 110 mmscmd increase in demand by 2030 and 129 mmscmd out of 198 mmscmd between 2030 and 2040. By 2030, CGD will surpass the fertilizer sector to become the largest gas consumer, accounting for over 87 mmscmd—29% of the total projected demand. Its share is expected to further rise to 44% by 2040.

In 2023–24, fertilizers consumed 58 mmscmd, power 25.2 mmscmd, and refineries 22 mmscmd. Fertilizer sector demand is likely to grow moderately to 65.3 mmscmd by 2030 and 72.9 mmscmd by 2040. Power generation will use 35.7 mmscmd by 2030 and 43.5 mmscmd by 2040. Meanwhile, gas usage in refineries and petrochemical plants is projected to nearly double to 43.3 mmscmd by 2030.

India aims to increase natural gas’s share in its energy mix from 7% to 15% by 2030, positioning it as a transition fuel toward net-zero emissions by 2070. With domestic production lagging behind demand, LNG imports are set to more than double by 2030. LNG, especially as a transport fuel, could significantly reduce diesel dependency and play a major role in India’s energy transition.