India’s natural gas demand growth expected to skid into negative in 2025
In 2026, however, gas consumption growth is forecast to reach 7%, driven by an ongoing expansion of the city gas distribution and CNG filling station networks
The demand for natural gas in India, which increased by more than 10 per cent in 2023 and 2024, is expected to sink into negative in the current calendar year due to lower electricity generation by gas-based plants and high prices of liquefied natural gas (LNG).
The International Energy Agency’s (IEA) gas report 2025 points out that India’s natural gas market has undergone a transformation over the past five years.
Between 2019 and 2024, demand rebounded after a prolonged period of stagnation, with growth exceeding 10 per cent annually in both 2023 and 2024.
“In 2025, gas demand growth is expected to slow temporarily, with a projected decline of 3 per cent. Two factors are driving this short-term slowdown,” it projected.
First, milder summer temperatures have reduced the need for gas-fired electricity generation, in stark contrast to the exceptionally hot summer of 2024, explained the agency.
Second, higher spot LNG prices have prompted fuel switching in the industrial and oil refining sectors, where price sensitivity remains high. These developments underscore the responsiveness of India’s gas demand to both weather-related and global market fluctuations, IEA emphasised.
In 2026, however, gas consumption growth is forecast to reach 7 per cent, driven by the ongoing expansion of the city gas distribution (CGD) and CNG filling station networks, expanding industrial gas use and rising electricity needs.
Gas demand
Highlighting the recovery in India’s natural gas demand, the IEA expiated that this was driven by the rapid expansion of the city gas infrastructure, with the number of CNG stations quadrupling and residential connections more than doubling between 2019 and 2024, as well as by a temporary resurgence in domestic production.
Industrial demand also strengthened, especially in iron and steel, while gas use in oil refining increased as more facilities connected to the grid, it added.
India’s natural gas consumption is projected to grow by nearly 40 per cent from 2024 levels in the base case, reaching 99 billion cubic meters (bcm) by 2030.
With additional demand triggered by low spot LNG prices in the high case, total gas consumption could rise to around 107 bcm by the end of the decade, a nearly 50 per cent increase, compared with 2024.
Growth under this higher trajectory is led by the industrial sector, which is projected to expand by more than 35 per cent (15 bcm/ year) between 2024 and 2030, IEA said.
Production pangs
However, the IEA forecasts that India’s domestic gas production is projected to rise in the near term, but would fall to around the 2024 level of 35 bcm per year by 2030 under pressure from low prices, covering only about a third of total demand at the end of the decade.
The remainder will be met by LNG imports, which could double to nearly 72 bcm per year in the high case. Of this, close to 8 bcm could be triggered by low spot LNG prices, it added.
India’s natural gas production fell by 3 per cent Y-o-Y in the first eight months of the year. As demand declined more steeply than domestic gas output, the country’s LNG imports declined by almost 10 per cent Y-o-Y in the first eight months of 2025.
Published on October 28, 2025
