New Delhi: India is placing a big bet on natural gas as a cleaner transition fuel, with demand projected to rise sharply over the next two decades. But even as the Petroleum and Natural Gas Regulatory Board (PNGRB) has set out an ambitious vision in its new demand forecast, energy experts and industry voices are raising concerns about affordability, infrastructure readiness, and long-term sustainability.
The PNGRB’s “Natural Gas Projections – 2030 Base Case” outlines two scenarios: a conservative “Good-to-Go” (GtG) path, under which natural gas demand will rise to 297 Million Metric Standard Cubic Meters per Day (MMSCMD) by 2030 and 495 MMSCMD by 2040, and a more optimistic “Good-to-Best” (GtB) scenario projecting demand to hit 365 MMSCMD by 2030 and 630 MMSCMD by 2040. To put these figures into context, India’s natural gas consumption stood at 187 MMSCMD in 2024. According to the regulatory watchdog, the expected surge will be led by growth in city gas distribution (CGD), LNG-powered trucking, and industrial use.
India’s CGD network is projected to be the biggest driver of gas demand growth, with consumption expected to grow more than seven-fold by 2040 under the GtB scenario. Demand from CNG and piped natural gas (PNG) users is expected to surge from 37 MMSCMD in FY24 to 270 MMSCMD by 2040. PNGRB has already authorised 307 geographical areas and over 33,500 km of pipeline infrastructure, with about 25,000 km operational. The government’s push for clean cooking fuel and expanding (Piped Natural Gas) PNG access in urban areas has significantly driven this growth.
CGD companies — whose fortunes are closely tied to India’s gas infrastructure — are optimistic but conscious of the real-world hurdles that could slow adoption. “Overall, the CGD sector is expected to sustain its strong growth trajectory, with the projections appearing well within reach. However, the growth would be subject to favourable government and regulatory support,” said Ashu Shinghal, Managing Director (MD) of Mahanagar Gas Limited (MGL). “Infrastructure readiness, competitive pricing, and assured domestic gas allocation are all critical enablers for CGD expansion, but they can also become constraints if not addressed holistically,” he added.
While terming “price competitiveness” of the fuel as “vital” for driving its widespread adoption, Shinghal said that CGD operators will need domestic gas allocation to ensure faster adoption of CNG (Compressed Natural Gas) and PNG for the mobility and domestic sectors, respectively. “Without adequate allocation, operators may be forced to rely on expensive imported LNG which could jeopardise adoption and hence derail government’s objective and bringing down the potential investment in the sector,” he said.
It must be noted that the PNGRB, in its study, has based its projections on an influx of LNG from the US in the global market. “A favorable global ecosystem for LNG, especially with several LNG projects set to be commissioned in the USA, will create an influx of LNG. Adequate Regas capacity already existing in our terminals with expansion underway,” the study explained in the overview.
Another big plank on which the roadmap bases its projections is the widespread adoption of LNG for long-haul trucking. PNGRB projects that the number of LNG-powered heavy-duty vehicles on Indian roads could rise to 500,000 by 2040 — from just around 700 today.
“Yes, LNG is a highly viable alternative for freight and logistics in India,” said Anirudh Bhuwalka, CEO of Blue Energy Motors, which manufactures LNG-powered trucks. “At Blue Energy Motors, we believe LNG offers a compelling proposition — delivering up to 30 percent lower CO₂ emissions, 70 percent reduction in NOx, and near-zero particulate matter, thanks to its clean combustion properties. The fuel’s high specific density (~0.4–0.5 kg/litre) facilitates higher quantity storage enabling significantly greater range — up to 1,200–2,400 km per fill (depending on double tank or single tank model) — making it ideal for long-haul applications.” Bhuwalka added that LNG is not just environmentally preferable, but also commercially competitive.
“From an industry standpoint… we see LNG adoption in long-haul trucking accelerating significantly over the next 5–10 years. With long-haul freight comprising nearly 70 percent of India’s road logistics, and growing focus on ESG goals and TCO (Total Cost of Ownership) efficiency, LNG is emerging as the most viable solution. We believe the government’s target of 30 percent penetration for LNG in long-haul trucking is not only achievable but may be met ahead of time,” said Bhuwalka.
However, Purva Jain, Energy Specialist (Gas) at the Institute for Energy Economics and Financial Analysis (IEEFA), sounded a note of caution, saying, “… with India’s ambition of 100 percent zero-emissions trucks by 2050, investing in building the infrastructure for LNG trucks could also face a stranded asset risk.”
India currently has just 26 LNG fuelling stations, although plans are in place to double that number by year-end. Bhuwalka emphasised that this infrastructure rollout must be matched by supportive policy if LNG trucking is to scale meaningfully.
“To fully realise the potential of LNG trucking, India needs greater policy consistency and accelerated infrastructure rollout,” he said. “Currently, the country has around 26 LNG stations, with plans to double this by year-end. As adoption and network development go hand in hand, we believe this scaling must be supported by clear policy direction, faster execution of existing LNG plans, and encouragement for green freight initiatives. Measures like green freight corridors, long-term infrastructure planning, and support for early adopters will be critical. We encourage the government to stay proactive in its LNG roadmap and translate policy intent into sustained on-ground progress,” he said.
Despite the optimism from gas companies and truck manufacturers, analysts are concerned that the projections may underestimate the risks of market volatility and stranded infrastructure. “Demand from end users is price sensitive and high prices could hinder projected demand growth for gas in India,” said IEEFA’s Jain. “The projections are also based on the assumption of gas prices under USD 9/MMBtu. While the domestic gas prices from older fields are currently lower than that, they could go higher if prices are deregulated. Moreover, spot prices are higher and are expected to remain above USD 10/MMBtu through 2028.”
Jain also flagged concerns around overcapacity and underutilisation: “Increasing gas infrastructure faces stranded asset risk if the expected demand doesn’t follow through. Already underutilisation of gas assets is a concern for gas-based power plants, LNG terminals and gas pipelines. The increase in CGD infrastructure is also outpacing demand.”
She warned that relying heavily on gas could conflict with other energy trends: “The increasing renewable energy deployment, lower price discovery of firm and dispatchable renewable energy tenders, increased deployment of battery energy storage systems and decarbonisation policies can further impact the increased use of gas and LNG in India.”
And the bigger vulnerability remains global shocks: “The use of gas as a reliable, affordable fuel has been stripped off due to geopolitical disturbances, price volatility and supply issues. We saw in times of high prices and limited supply, committed LNG supplies being diverted from South Asian regions. It is imperative for India to diversify its fuel sources and increase the share of renewable energy in the energy mix to insulate the economy from LNG price volatility,” said Jain.
Some experts believe gas still has a role to play in India’s clean energy transition — but only in the short-to-medium-term. “India’s economic growth in the coming years is expected to increase its energy demand, including its demand for natural gas among other energy sources,” said Pallavi Das, Programme Lead at the Council on Energy, Environment and Water (CEEW). “Moreover, given infrastructure investments in the gas network as well as hard-to-abate sector such as industries, near term increase of natural gas is expected. However, in the long-term, as we get close to our net zero target, the use of natural gas will need to decline.”
Das sees a temporary but useful role: “Natural gas can still be a bridge fuel. In the power sector, our underutilised natural gas can act as a bridge fuel with its quick ramp-up rates for smoother RE integration and a more flexible grid. This near-term role can allow time for battery cost reduction and scalability. In the hard-to-abate, industries, it has a slightly long-term role until hydrogen becomes viable.”
But she cautions against long-term over-reliance: “Leaning heavily on imported LNG offers short-term benefits like cleaner fuel compared to coal, supply flexibility, and support for industries such as fertilizers and city gas. However, it also poses energy security threats, exposure to global price volatility specially with the Russia-Ukraine war and stranded infrastructure assets in the long-term, specially if we continue to invest. To align with India’s long-term climate goals, LNG can be used as a transitional fuel but not as a primary energy source.”
In 2018, the government first announced the target of pushing the share of natural gas in India’s energy mix to 15 percent by 2030. At the time, the share of gas in India’s energy basket stood at 5.8 percent. More than six years later, the share of natural gas is 6.7 percent. It must be noted that India’s overall energy consumption has increased and the consumption of natural gas on year-on-year basis has been growing, however, the growth remains modest.
India’s natural gas plans reflect both economic ambition and energy pragmatism. As the government pushes forward with pipeline expansions, CGD coverage, and LNG trucking rollouts, stakeholders across the energy landscape agree on one thing: success will depend on keeping price volatility, stranded asset risk, and climate commitments in sharp focus.
