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Domestic gas drives industrial consumption
Natural gas consumption in India is recovering from the post-COVID-19 slump, primarily driven by the fertiliser, city gas distribution (CGD) and industrial sectors. Even though the power sector has shown an incremental increase in gas use for peak power demand in the last two fiscal years, it has not reached pre-pandemic levels yet. Small- to medium-scale industries, including tea plantation, manufacturing, liquefied petroleum gas (LPG) shrinkage and sponge iron, are driving consumption growth.
The industrial sector, including refinery, petrochemicals and other industries, witnessed a 37% increase in gas consumption in FY2023-24 from the pre-pandemic levels of FY2019-20. However, gas consumption by other industries – excluding refinery and petrochemicals – surged 136% over the period. Gas consumption by other industries shot up from around 7,000 million metric standard cubic meters (MMSCM) in FY2019-20 to over 16,000MMSCM in FY2023-24, accounting for almost two-thirds of the total gas consumption by the industrial sector.
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