The sales volume of city gas in India is set to rise by around 27 per cent in financial year 2021-22 as per CRISIL ratings. The increase in sales volume would be driven by increased consumption owing to rebounding vehicular mobility and industrial activity.

The sales volume of compressed natural gas (CNG), which accounts for about 40 per cent of total consumption, will be driven by an expanding network of filling stations that have increased to 3,180 in May 2021 from 2,500 in May 2020. Further, sales of CNG cars are expected to increase by 50 per cent to 260,000 units in 2021-22 due to their lower total cost of ownership as compared to petrol and diesel run vehicles.

In the previous financial year ended March 2021, city gas volume contracted by 13 per cent as both demands for compressed natural gas and industrial piped natural gas, which together contribute 90 per cent of total city gas consumption, were hit by the Covid-19 pandemic. At 27 per cent in the current financial year ending March 2022, the annual growth rate in India will be higher than the 8 per cent rate in the year ended March 2020, a year before the Covid-19 pandemic outbreak.