Report Overview

The City Gas Distribution (CGD) market in India is anticipated to grow at a CAGR of 10% from an estimated 9,223 MMSCM (Million Metric Standard Cubic Meters) in 2020 to 25,570 MMSCM by 2030.

India City Gas Distribution (CGD) Market, 2028 – Industry Trends & Forecast Report

India City Gas Distribution Market – Overview                    

Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), which are made from colorless and odorless natural gas, respectively, are then delivered to end consumers through the City Gas Distribution (CGD) network. India has enormous natural gas reserves, and as it is environmentally friendly and convenient to transport. CGD is expected to develop significantly over the next ten years. In the coming years, CGD is expected to be crucial for the expansion of all industries, including transportation, residential, commercial, and industrial.

India City Gas Distribution Market – Industry Trends and Market Forecast                                            

In India, City Gas Distribution (CGD) Market is expected to expand at a CAGR of 11.4% during the forecast period between 2022 and 2028. Due to rising natural gas demand from the automotive, industrial, commercial, and residential end user categories, the market is expected to grow. The market is likely to be dominated by Gap Connections. A PNG connection is the delivery of natural gas to residential, commercial, and industrial areas via galvanized iron pipelines together with the required fittings, pressure regulators, and meters. As of January 2020, there were 59 lakh domestic PNG connections, 29,000 commercial connections, and 10,000 industrial connections. With over 22 lakh home connections, 19 thousand business connections, and 5,000 industrial connections, Gujarat has the most connections among the states in India. PNG connections are forecast to rise over time as a result of growing government measures to boost the usage of natural gas as cooking gas to lower the number of fatalities from the combustion of fossil fuels, such as wood, coal, or cow dung.

Growth Drivers                                   

Rapid Urbanization and Increasing Number of CNG Stations and PNG Connections

Urbanization is one of the main factors driving the India City Gas Distribution Market, as it increases demand for power. Natural gas and other greener energy sources are conveniently accessible through the CGD network. The PNG connections and CNG stations dominate the India CGD market. While CNG stations are established to access natural gas for transportation, PNG connections are offered for residential, commercial, and industrial uses.

Restraints                                           

Lack of Transmission and Distribution Infrastructure

Limited infrastructure for gas transmission and distribution is a major barrier to the growth of India city gas distribution market.

Impact of COVID-19 on the Market of City Gas Distribution in India    

According to government officials and gas company executives, India's city gas demand declined by 25–30% during the COVID-19 pandemic and subsequent lockdowns. As spot LNG imports were reduced since the beginning of April 2021, LNG carriers destined for Indian ports have been diverted to other markets, and many LNG boats are waiting longer than usual to discharge their cargoes, weaker demand has already had an impact on gas procurement. Manufacturing has slowed down or reduced the number of shifts due to an increase in diseases, migrant workers leaving cities, or maintenance work, while it has not completely stopped like it did in 2020. The demand for diesel and gasoline has been significantly impacted, and to a lesser extent, so has the demand for natural gas. However, most Indian refiners claimed they were maintaining run rates because they can export surplus products.

Regional Insights                           

As there are many projects in the early stages of the CGD Bidding Rounds, the West area dominates the India City Gas Distribution Market regionally. But the government's increased emphasis on moving toward a gas-based economy has been driving the CGD market in East and South regions as well.

Competitive Landscape                    

The market for city gas distribution (CGD) in India is only slightly fragmented. Indraprastha Gas Limited (IGL), GAIL Gas Limited, Mahanagar Gas Limited (MGL), Gujarat Gas Limited (GGCL), Adani Gas Limited, Maharashtra Natural Gas Limited (MNGL), and Central UP Gas Limited (CUGL) are key players in the India City Gas Distribution Market.

Recent Developments                     

Bharat Petroleum Corporation Ltd (BPCL) announced in January 2022 that it will spend INR 10,000 crore over the following five years to build city gas distribution networks in the cities for which it obtained licenses in the 11^th round of bidding. The government-owned business Indian Oil Corporation Limited (IOCL) announced intentions to invest INR 70,000 million in new city gas distribution (CGD) projects in January 2022. The business also disclosed that IOCL secured roughly 33% of the demand potential in the 11th bidding round.

Scope of the Report

By Types

• Pipeline Natural Gas
• Compressed Natural Gas

By End-User

• Automotive
• Residential
• Commercial
• Industrial

By Region

• North India
• South India
• East India
• West India