India’s gas demand to grow by 5 BCM in 2024 driven by industry & transport sectors

Gas consumption by the world’s fourth largest liquefied natural gas (LNG) importer is expected to grow 7.1 per cent y-o-y, or around 5 billion cubic meters (BCM), in 2024. The world’s fastest emerging economy’s consumption rose by 12.7 per cent y-o-y, or around 7 BCM, in 2023.  “In India, industrial and transport demand will largely continue to drive growth in gas demand, balancing a slower pace of residential and commercial natural gas demand growth,” it added.

Industry and trade sources said that demand for gas from the industry has been robust and is expected to continue in the short to medium term fuelled by the green energy transition. Besides, the growth in vehicles running on compressed natural gas (CNG) is also pushing up consumption.

Quoting Indian government data, the report said that CNG vehicles, including three-wheelers and cars, grew 53 per cent y-o-y to 1,80,000 in India from 2022 to 2023.

“As a result, demand for natural gas from transport increased by 1 BCM in the period, a trend slated to continue,” it added.

India has an “ambitious target” to increase the share of natural gas in its primary energy mix from the current 6.7 per cent to 15 per cent by 2030, surmounting challenges of affordability and availability, the report said, adding that to address these issues, the country has implemented several policy measures.

These changes are likely to boost domestic consumption and encourage fuel switching from coal and oil to natural gas - a positive possibility for reducing greenhouse gas emissions and improving air quality, it added.