At a recent Indian Infrastructure conference, Anjani Kumar Tiwari, member of PNGRB, reaffirmed the regulatory board’s proactive and transformative approach. He emphasised that natural gas is not merely a “transition fuel”— it is now a strategic anchor in India’s energy policy. From economic foresight to ecological prudence, the case for natural gas has never been stronger. Its inherent attributes — clean combustion, energy efficiency and broad applicability—make it indispensable to India’s present and future energy ambitions.

Natural gas is no longer simply viewed as a transitional bridge to a greener tomorrow—it has firmly established itself as the fuel of the future, pivotal to India’s evolving and ambitious energy landscape. Once perceived as a supporting actor in the nation’s energy narrative, natural gas is now stepping confidently into the spotlight, claiming its rightful role as a cornerstone of sustainable growth. Leading this dynamic transformation is the Petroleum and Natural Gas Regulatory Board (PNGRB), which is orchestrating a revolution through forward-looking policy reforms, strategic infrastructure development and an unwavering commitment to fairness, efficiency and innovation.

Driven by a bold and holistic vision to establish a world-class, future-ready energy ecosystem, the PNGRB has authorised 307 geographical areas (GAs) for the development of city gas distribution (CGD) networks. This extensive outreach nearly blankets the entire nation, laying the groundwork for a comprehensive and inclusive energy transition. The move reflects a deep strategic intent to provide every Indian household and enterprise access to a clean, efficient and reliable energy source, while catalysing economic growth and environmental sustainability.

India’s energy architecture is characterised by a complex and evolving interplay between traditional and emerging sources—coal, renewables, natural gas, hydrogen and compressed biogas (CBG). Rather than seeking a one-size-fits-all solution or a zero-sum substitution, the national strategy is aimed at optimising the unique strengths of each resource. The goal is clear – to foster innovation-led, inclusive and environmentally conscious development. In this balanced mosaic, natural gas has proven to be a linchpin—offering scalability, reliability and environmental compatibility.

Current pipeline network and expansion plans

The scale and speed at which India’s natural gas infrastructure is expanding is truly unprecedented. With an impressive 25,000 km of operational pipeline already in place and an additional 10,000 km under development, the backbone of India’s clean energy grid is being robustly reinforced. This sprawling network supports a daily gas consumption of approximately 200 million metric standard cubic metres (mmscmd), with half of this demand being met through domestic production—a significant marker of energy self-reliance and resilience.

To sustain and accelerate this growth momentum, the  PNGRB has unveiled an ambitious roadmap that aims to revolutionise access and affordability. Targets include 130 million piped natural gas (PNG) connections and 18,336 compressed natural gas (CNG) stations over the coming years. This is a quantum leap from the current figures of 14 million PNG connections and more than 7,000 CNG stations, underscoring the scale of transformation in the pipeline.

At the heart of this expansion is a dual-purpose mission – to meet India’s international climate commitments and net-zero targets; and to leverage natural gas as a clean, efficient and economically viable base fuel. CGD companies serve as both the demand generators and demand assessors in the broader gas value chain. Their role is pivotal, as they bridge the gap between upstream infrastructure and downstream consumption. With a projected compound annual growth rate (CAGR) of 10 per cent, the CGD segment is poised to grow from 41 mmscmd at present to a staggering 164 mmscmd by 2040. This places CGD operations squarely at the epicentre of India’s natural gas growth story.

Gas market reforms

Acknowledging the sector’s vital role, the  PNGRB has rolled out a slew of reforms aimed at nurturing a competitive, transparent and investor-friendly environment. Key among these is the transformative overhaul of the pipeline tariff determination framework—a critical intervention to improve affordability and accessibility for end-users, especially in the domestic and transport segments.

In March 2025, the PNGRB issued a comprehensive public consultation document proposing several path-breaking amendments to the existing pipeline tariff regulations. Some key highlights include:

  • Reducing the number of unified tariff zones from three to two, streamlining cost structures and enhancing consumer clarity;
  • Implementing a uniform tariff for all domestic PNG and CNG users, fostering equity and inclusion;
  • Incentivising operators of isolated pipeline networks to encourage greater participation and connectivity;
  • Creating a balanced mechanism for sharing the benefits of excess volume between consumers and operators, ensuring fair value distribution across stakeholders.

Simultaneously, the PNGRB is reviewing access codes, fine-tuning imbalance charges and actively collaborating with central and state governments to simplify and expedite business processes for CGD companies. These wide-ranging reforms aim to catalyse investments, deepen connectivity and fortify the energy ecosystem against future shocks.

Other trends

India’s natural gas journey is also marked by resilience and adaptability. The sharp decline in domestic gas production several years ago spurred the growth of liquefied natural gas (LNG) imports, supported by a steadily expanding fleet of regasification terminals. Today, India boasts a total LNG terminal capacity of 52.7 million metric tonnes per annum (mmtpa), with plans to augment this by an additional 30–40 mmtpa in the coming years. This evolving infrastructure landscape reflects India’s commitment to ensuring energy security through diversification and capacity building.

However, utilisation rates at both the pipeline and terminal levels remain modest—hovering at 50–55 per cent. This signals the urgent need for better demand aggregation, dynamic market incentives and integrated infrastructure planning. Compounding these challenges is India’s heavy reliance on energy imports—approximately 85 per cent for crude oil and 50 per cent for natural gas—making the economy vulnerable to global price swings and geopolitical disruptions. In such a context, India’s natural gas strategy must remain nimble, forward-looking and resilient to both domestic and international uncertainties.

Key concerns and challenges

Despite remarkable progress, several systemic challenges persist. Delivering gas to densely populated or remote areas is often constrained by limited access corridors, legacy pipeline systems and suboptimal emergency response mechanisms. As the sector matures, the integration of biogas and other hydrocarbon streams adds layers of complexity that demand stringent safety protocols, advanced operational frameworks and continuous upskilling of the workforce.

Financial sustainability is another area of concern. Many CGD operators, particularly smaller entities, struggle with limited capital reserves, leaving them exposed to market volatilities and revenue disruptions. Network gas losses, ranging from 2 per cent to a staggering 36 per cent, further dilute operational efficiency and threaten long-term profitability.

On the mobility front, the adoption of LNG-powered freight vehicles—touted as a clean alternative to diesel—is still in its infancy. High upfront costs, a dearth of refuelling infrastructure and competition from electric mobility solutions have impeded a broader uptake. Unlocking this segment’s potential will require a synergistic approach involving targeted subsidies, industry partnerships and proactive public-private collaboration.

Integrated vision for the future

To truly capitalise on its growth potential, the CGD sector must embrace data-driven decision-making. This includes aggregating real-time demand, utilising gas trading platforms, strengthening engagement with pipeline operators and maintaining transparent communication with end-users. Improved data governance, robust forecasting tools and digital integration across the value chain will enable better synchronisation between supply, infrastructure and capital allocation. End of exclusivity should be incentivised. Strategic reforms should be introduced to ensure fair play in CGD through tariff balance and market openness.

India’s natural gas sector stands at a defining crossroads—armed with the momentum of progressive reforms, bolstered by cutting-edge infrastructure and guided by a resolute policy vision. The road ahead is filled with promising potential. Through strategic investments, collaborative governance and unwavering commitment from both public and private stakeholders, natural gas is set to transcend its transitional identity. It is evolving into a foundational pillar of India’s energy independence, environmental stewardship and economic resurgence.

Natural gas is no longer just an option, but it is the fuel of choice—a catalyst for a sustainable, secure and self-reliant energy future for India.