India gas consumption falls 7.5% in Jan-Oct amid monsoons, cheaper fuels

India's natural gas consumption declined 7.5 per cent in January-October 2025 to 56,760 MMSCM, as prolonged monsoons reduced power demand and cheaper alternate fuels drew users away, PPAC data show

India’s natural gas consumption fell 7.5 per cent in the first 10 months (January to October) of the calendar year 2025, despite the government’s efforts to boost demand to increase the fuel’s share in the total energy mix.

 

The country’s gas demand was 56,760 million metric standard cubic metre (Mmscm) during January to October 2025, significantly lower than the 61,368 Mmscm in the same period last year, according to Petroleum Planning & Analysis Cell (PPAC) data.

 

According to experts, the decline in gas demand stands in stark contrast to the 13 per cent increase in natural gas usage in 2024 and is mainly attributed to the prolonged monsoon season, which affected power demand, and lower prices of alternative fuel options such as liquefied petroleum gas (LPG) and crude oil.

 

“Monsoon was very consistent this year, which lowered gas demand in the power sector, coupled with refinery and fertiliser plants’ shutdowns,” said Prashant Vasisht, senior vice-president & co-group head, Corporate Ratings, Icra.

 

Indian consumers are highly sensitive to energy prices and prefer the cheapest source available in the market, which further dragged gas demand in the year.

 

“LPG prices have particularly come down this year. Customers who have an option of using either gas or some other fuel switch to the cheaper fuel,” said Gajendra Singh, former marketing director at Gail (India) and former member of Petroleum and Natural Gas Regulatory Body (PNGRB).

 

Meanwhile, the country’s domestic natural gas production declined over 3 per cent to 28,957 Mmscm in the January to October period as upstream companies struggle to boost output. Experts believe that the overall gas demand in the country is likely to remain muted in the coming year, too, due to the absence of major new gas projects.

 

“The overall gas demand is expected to remain low as no new fertiliser plants are coming up. The City Gas Distribution (CGD) sector will see higher demand. Other sectors which can support demand are refineries and industrial customers, but the issue is that they can switch to cheaper fuel available, like propane. For 2026, we are expecting 0-2 per cent growth (in gas demand),” said Vasisht.

 

The city gas distribution (CGD) sector, however, can boost gas consumption in the country, registering double-digit growth in the coming year. “The geographical areas which were authorised earlier have reached maturity level, which means the required infrastructure has been laid. More compressed natural gas (CNG) stations are being set up, and a pipeline is being built for piped natural gas (PNG), which will boost consumption,” said Singh.