Statsguru: Natural gas targets remain blurry as 2030 goal seems unlikely

India’s ambition of increasing the share of natural gas in its energy mix to 15 per cent by 2030 appears unlikely to be realised.

 

A recent report by the International Energy Agency (IEA) highlights that the share of natural gas supply in India’s primary energy mix declined to 5.08 per cent in 2022-23 from 8.23 per cent in 2010-11. Higher cost of natural gas imports and relatively slow growth of gas infrastructure vis-à-vis gas demand growth in the country explain this trend (Chart 1).

 

 

The report, titled ‘India Gas Market Report’, shows that the share of industrial use of natural gas more than doubled between 2010-11 and 2022-23, while non-energy usage of natural gas dropped significantly (Chart 2).

 

 

Owing to the global energy crisis of 2022 and the consequent price increase, the share of natural gas imports in gross energy imports fell from 7.51 per cent in 2020-21 to 5.43 per cent in 2022-23 (Chart 3).

 

 

Total number of piped natural gas (PNG) connections increased at a 21.23 per cent compound annual growth rate (CAGR) between March 2018 and March 2023, while the number of CNG stations rose at a 34 per cent CAGR during the same period. However, the growth does not seem substantial enough to achieve the 15 per cent target (Chart 4).

 

 

The report also posits Gujarat as a model for India’s gas-based economy, with natural gas accounting for 25 per cent of its energy mix, exceeding the other Indian states in gas-based infrastructure. Gujarat also tops the list in share of India’s natural gas consumption at 23.85 per cent, followed by Uttar Pradesh and Maharashtra (Charts 5 and 6).