India’s City Gas Distribution To Reach 25% By 2030: Report

Mumbai: As the government aims to transform the nation into a gas-based economy, the contribution of city gas distribution (CGD) is projected to increase to 25 per cent by 2030, from 20 per cent in FY24, according to a report released on Monday. Gas consumption volumes for the sector are likely to grow at a cumulative average growth rate (CAGR) of 10 per cent during FY25-FY30, supported by capital expenditure (capex) of Rs30,000 crore during FY25-FY27.

The CGD sector ranked as the second-largest consumer after the fertiliser industry in India's overall natural gas consumption in FY24, according to the report by CareEdge Ratings. Historically, CGD consumption has demonstrated steady growth, with a temporary decline in FY23 amid a sharp rise in natural gas prices following the Russia-Ukraine conflict. However, demand recovered in FY24. "In the CGD consumption mix, CNG is expected to continue dominating volumes, supported by growth in CNG-powered vehicles and complemented by an increase in refuelling stations," CareEdge Ratings Assistant Director Tej Kiran Ghattamaneni said.

The PNG-D penetration has enormous potential, with its share compared to LPG at only 1.5 per cent-2 per cent in the South, East, and North-East parts of the country.