India's Gas Market Sees Unprecedented Growth in 2024

In a remarkable shift towards cleaner energy, India's gas consumption soared by 11% in 2024, driven by a significant increase in LNG (liquefied natural gas) imports. This surge aligns with the government's vision for a low-carbon economy but also highlights the challenges of energy security in the face of dwindling domestic production.

Key Drivers Behind the Gas Consumption Spike

Industries and oil refineries emerged as the primary contributors to this growth, with the industrial sector witnessing a 22% increase in gas consumption. The refining sector wasn't far behind, with a 26% rise. Additionally, the residential, commercial, and transport sectors experienced double-digit growth, thanks to the lower relative prices of imported gas.

Impact of Weather and Economic Expansion

The period from May to July saw heatwaves pushing electricity demand to record levels, leading to a 32% increase in gas consumption for power generation. The International Energy Agency (IEA) highlighted a 21% year-on-year rise in LNG imports, facilitated by a 12% drop in average spot LNG prices compared to the previous year.

Looking Ahead: Challenges and Opportunities

With the government aiming to increase natural gas's share in the energy basket to 15% by 2030, from the current less than 7%, the report forecasts an 8% increase in gas demand this year. However, the declining domestic production poses a significant challenge to meeting this growing demand.