The post lockdown times have seen the Indian gas sector looking up with a sharp increase in the domestic gas supply from no growth between FY17 and FY20 to over 12 per cent compound annual growth rate (CAGR) over FY21 to FY24, even amid the uneven impact of COVID-19 on gas consumers.
The growth was also driven due to a global excess supply (over demand) that kept the Liquefied Natural Gas (LNG) prices competitive and that is expected to benefit the Indian gas utilities further. A report by research firm HDFC Securities points out that low prices coupled with pipeline infrastructure expansion will ensure robust gas demand in India.
The commissioning of long-distance gas pipelines, the rising penetration of the city gas network post the tenth round of auctions in November 2018 and the low gas price (domestic and LNG prices are currently at their 10-year low) will also further drive the growth of the segment.
The report further states that domestic gas production in India will rise for the first time in almost a decade and the increase is expected by around 40 per cent over FY21-24.