New Delhi: India’s natural gas consumption averaged about 190 million metric standard cubic metres per day (mmscmd) during April–October FY26, down 4.6 per cent from around 200 mmscmd in the same period last year, as lower power sector offtake, refinery and fertiliser maintenance shutdowns, and seasonal swings in liquefied natural gas (LNG) prices curbed demand, according to Crisil Intelligence.
The moderation followed a pronounced dip in summer months after an early onset of the southwest monsoon reduced cooling demand. This contrasted with the summer of the previous fiscal, when gas consumption rose to about 203 mmscmd amid policy-led dispatches of gas-based power plants. Spot LNG prices averaged around $13 per MMBtu, up about 34 per cent on-year, pushing gas-based generation out of the merit order and limiting incremental demand, the report said.
Demand found a floor during the monsoon, with consumption rising 1.2 per cent from summer levels to around 191 mmscmd, supported by a nearly 9 per cent correction in spot LNG prices and the resumption of refinery and fertiliser operations. Policy intervention to avoid fertiliser plant shutdowns helped stabilise base demand even as power sector offtake remained muted, Crisil Intelligence noted.
While overall gas consumption moderated, city gas distribution (CGD) consumption rose 8.8 per cent year-to-date to about 44 mmscmd, lifting CGD’s share in total gas demand to around 23 per cent from about 20 per cent last year. The expansion was anchored by network growth to 8,477 CNG stations and 15.9 million domestic PNG connections, with 361 stations and 0.9 million connections added till October. Over the past five fiscals, incremental CNG additions have shifted towards non-metros and Tier 2/3 cities, reducing concentration, the report said.
Supply-side changes altered sourcing without denting volumes. Allocation of administered price mechanism gas to CGDs declined to 35–40 per cent from 55–65 per cent last year, increasing dependence on new-well gas, HPHT gas and re-gasified LNG, lifting import dependence to about 36 per cent during April–October from around 32 per cent a year earlier. Calibrated retail price pass-through limited volume impact, Crisil Intelligence said.
The report also pointed to a two-zone pipeline tariff framework notified by the petroleum regulator, effective January 1, 2026, which places priority CGD segments under a uniform tariff of ₹54 per MMBtu irrespective of distance. This lowers transportation costs for distant CGD markets by about 50 per cent versus earlier distance-linked bands, improving affordability and supporting volume ramp-up, it said. Near-term gas demand is expected to remain range-bound, with CGD cushioning the impact of easing LNG prices, Crisil Intelligence added.
