By Suresh P. Manglani, Executive Director and Chief Executive Officer, Adani Total Gas Limited

The Government of India has set a target to increase the share of natural gas from 6 per cent to 15 per cent in the energy basket, with the objective of reducing carbon emissions and tackling air pollution. Further, the Petroleum and Natural Gas Regulatory Board (PNGRB) has now granted authorisation for nearly 100 per cent of the country’s area (except the Andaman & Nicobar Islands and Lakshadweep) to develop city gas distribution (CGD), covering 307 geographical areas (GAs) across more than 780 districts operated by over 40 CGD entities. As per the latest data, there are 15 million home piped nat­ural gas (PNG) connections, more than 8,200 compressed natural gas (CNG) stations, and nearly 65,000 commercial and industrial (C&I) connections in the country.

The CGD sector contributes to 20 per cent of India’s total natural gas consumption. CGD volumes have grown by 10-12 per cent CAGR over the past five years, the fastest growth rate recorded among all natural gas consuming segments. It is expected to increase further in the coming years, on account of growing gas infrastructure penetration and a shift to cleaner fuels, thereby driving the country’s overall natural gas demand.

ATGL’s experience and key business highlights

Adani Total Gas Limited (ATGL) is a leading CGD player in the country, operating across 34 GAs and 95 districts and connecting more than 0.98 million households. It operates 650 CNG stations and has more than 14,000 inch-km of steel pipeline network. Over the past five years, ATGL’s volumes have nearly doubled to reach more than 2.9 million metric standard cubic metres per day (mmscmd).

Additionally, ATGL has a 50:50 joint venture, Indian Oil Adani Gas Private Limited, with Indian Oil Corporation Limited (IOCL), which is involved in the CGD business, with 19 GAs and 30 districts across the country. Another 50:50 joint venture, Smart Meter Technologies Private Limited (SMTPL), is in the business of manufacturing smart gas meters.

Apart from its core CGD business, ATGL has diversified into the electric vehicle (EV) charging infrastructure and compressed biogas (CBG) segments via wholly owned subsidiaries Adani TotalEnergies E-Mobility Limited (ATEL) and Adani TotalEnergies Biomass Limited (ATBL) respectively, thus contributing to the national vision of decarbonisation. ATEL has installed nearly 3,800 charging points across 26 states, and ATBL is operating an agri-waste-to-CBG plant near Barsana, Mathura.

Smart technologies at the core of ATGL’s operations

Digitalisation is a way of life at ATGL and is deeply embedded in the company’s thinking process. Its digital-first approach empowers customers, partners and workforce with modern tools, enabling automation in each step. As a part of digital innovation, ATGL has taken various initiatives for streamlining business processes, operations, analytics and data-driven decision-making.

The My AdaniGas App enables digital payments, customer onboarding, service requests tracking, etc., thus providing customer full digital control of their journey with ATGL. Further, the interactive voice response system provides voice assistance in several languages and enables customers to address complaints quickly.

The SOUL Digital Platform enables digital network management, operations and mainten­ance, project management, vehicle tracking, LUAG (lost and unaccounted gas) management, etc., thus improving operational efficiency as the company scales up.

Strengthening LNG infrastructure in India

Over the past years, liquified natural gas (LNG) imports have grown rapidly to cater to the growing natural gas demand. Looking ahead, with demand expected to grow further, LNG imports will likely increase. At present, there are a total of eight LNG import, storage and regasification terminals operating in the country, with a combined capacity of over 50 million tonnes per annum (mtpa). While the majority of these terminals are operating below their total capacity at present, as demand increases, there may be a need to further increase the country’s LNG import capacity and provide these terminals with connectivity to the national gas grid to ensure effective utilisation.

CGD volumes have grown at 10-12 per cent n CAGR over the past five years, the fastest growth rate recorded among all natural gas consuming segments.

Towards a uniform and transparent gas ecosystem

The government and the regulator have both taken a holistic view of the gas sector and have been continuously undertaking various reforms to support the entire value chain, from upstream to midstream and downstream. The key reasons for increasing investment in the natural gas sector are that we have a government and a regulator that listen to the feedback of end-consumers and industry, and that the industry has also been constructively appraising its challenges and pain points.

The CGD sector has been a key ­beneficiary of these reforms, with progressive policies such as domestic pricing reforms (Kirit Parikh committee recommendations), unified tariff for pipeline transportation, and the more recent notification of uniform tariffs for CGD (home PNG and CNG for transport) consumers, regardless of their distance from the source. When APM supply declined, the government came forward to supplement it with New Well Gas (NWG) and is providing significant support for the development of CBG as a viable alternative. As a result of these initiatives, CGD segment volumes and infrastructure are growing at a faster pace.

A few more impactful initiatives can act as a catalyst, further increasing the growth rate and taking away the remaining pain points of the industry. The following are my broad suggestions:

  • Bringing natural gas under the GST regime: This will result in realising the government’s vision of one nation, one tax for the natural gas segment and will remove inefficiencies across the natural gas value chain, creating a seamless market from producer to end-consumer. This will also significantly increase the uptake of natural gas vis-à-vis often cheaper but more polluting alternative fuels. Until such time as natural gas comes under the GST regime, the state governments may take the initiative to reduce value-added tax (VAT) on all forms of natural gas (CNG, PNG and LNG) to under 5 per cent. Commendably, a lot of states have already lowered VAT on natural gas, thus reducing the burden on end-consumers. Also, the excise duty on the compression of natural gas (for the purpose of fuelling CNG vehicles) shall be removed, as it results in an unnecessary burden on CNG consumers, especially in the hinterland where gas compression and transportation add to the cost.
  • Devising a uniform policy for the CGD segment: A uniform policy will be beneficial for the CGD segment, with progressive steps such as moving away from a “permit to dig” to an “inform and dig” system, a single-­window approach to permissions, uniform and nominal right-of-use and restoration charges for infrastructure laying, deemed approvals, etc.
  • Boosting MSME demand: Micro, small and medium enterprises (MSMEs) are the growth engine of the country, contributing to nearly 30 per cent of GDP and more than 40 per cent of total exports. Natural gas is an ideal solution for industry to decarbon­ise, switching away from more polluting solid and liquid fossil fuels. To boost nat­ural gas adoption among MSMEs, a policy of consumption-linked incentives, with direct benefit transfer to the end-consumer, can enable this critical segment of the Indian economy to transform and align with the country’s sustainability goals.

Finally, given the country’s objective of decarbonisation – which has resulted in continuous innovation and policy measures promoting various fuels such as motor spirit, high speed diesel, bioethanol, natural gas, CBG, EV and green hydrogen – a comprehensive fuel policy is required to enable consumers and investors alike to select the appropriate fuel and technologies to use and invest in, given the fact that all of these fuels are going to coexist for at least the next few decades.

It is thus important that coherent policies are adopted to promote and govern these ­fuels. As a suggestion, the fuels can be categorised in three baskets namely green fuel, clean fuel and other fuel – on the criteria of tail-pipe emissions, life cycle emissions, air pollution, use of renewable sources, import dependence, technology maturity, etc. The policies for all ­fuels in one basket should be the same, thus bringing similarly beneficial fuels on to a level playing field. Such a comprehensive policy will boost investor confidence and help end-consumers in selecting the right fuel for their use.

CGD to lead India’s rising natural gas demand

The CGD segment is expected to drive the overall gas consumption in the country. CNG remains an affordable and clean alternative for the transportation segment, making it attractive for both private and commercial users. In FY 2025, sales of CNG four-wheelers (4W) witnessed 30 per cent year-on-year growth. Also, CNG penetration in the overall 4W segment grew to 15 per cent in the same year. The synergy between rising CNG vehicle sales and expanding infrastructure is driving a major shift in India’s transportation landscape.

On the other hand, the penetration of CNG in the three-wheeler segment has reached 28 per cent in the same period. It is observed that sales of CNG vehicles have doubled over the past five years and are expected to further increase in the coming years with infrastructure development in newly authorised GAs. PNG consumption is expected to increase with a growing number of connections, especially in new GAs, and consumption in the C&I segment is expected to grow with favourable government policies and softening imported gas prices in the future.

ATGL is committed to providing clean, reliable and affordable natural gas to its consumers. With this objective, the company is strengthening its CGD infrastructure, especially in the newly authorised GAs. It is also focusing on creating awareness about the benefits of natural gas as a clean, affordable and safe fuel. The company’s efforts towards digitalisation and operational excellence will continue. It will also continue to focus on developing its adjacent and sustainable businesses of EV charging and CBG, to provide a bouquet of clean and sustainable fuels to customers.