LPG demand to decline 7% by 2030 on growing piped natural gas adoption
natural gas will eat into its growth, according to a joint study by the Petroleum and Natural Gas Regulatory Board (PNGRB) and Deloitte.
Household consumption makes up about 90% of the total LPG consumption in the country. About 99% of households have access to clean fuel—domestic LPG connections have doubled in a decade to 32 crore —but many poor families consume an abysmally low amount of fuel. Their consumption is expected to expand in the future and can fuel demand for LPG.
However, this growth will likely be more than offset by a rapid expansion of piped natural gas (PNG). “As city gas distribution sector grows, it will be the key factor that will erode LPG demand,” the study said. “Demand erosion will be prominent in the domestic segment as PNG—domestic and commercial—is cheaper than LPG.”
The study expects domestic PNG connections to grow tenfold to 12.5 crore by 2032. Nearly all of India now has a city gas distribution licensee responsible for supplying PNG to households, commercial establishments and industries.
The study expects an LPG demand erosion of 5.4 million metric tonnes by 2029-30. This would result in an effective LPG demand of 27.6 MMT in 2029-30, instead of 33 MMT without the PNG-induced erosion. In 2023-24, India consumed 29.6 MMT of LPG.
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