India City Gas Distribution (CGD) Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The India City Gas Distribution (CGD) Market is projected to register a CAGR of over 10% during the forecast period.

COVID-19 negatively impacted the market in 2020. Presently the market has reached pre-pandemic levels.

Key Highlights

• Over the medium term, government initiatives to promote natural gas for emission control and minimize the use of conventional fuels like wood, coal, and petrol in various industries are expected to drive the market.
• On the other hand, the lack of awareness in rural areas and the complicated permitting process for pipeline and retail outlet installations are expected to hinder the market's growth.
• Nevertheless, the government's intention of converting India into a gas-based economy is expected to increase the natural gas share in its energy mix from 6% in 2019 to 15% by 2030. This is expected to create enormous opportunities for the India City Gas Distribution (CGD) Market.

India City Gas Distribution Market Trends

PNG Connections are Likely to Dominate the Market

• A PNG connection is the supply of natural gas to the home, commercial, and industrial sectors via galvanized iron pipelines, together with the requisite fittings, pressure regulators, and a meter. Natural gas sources, which are mostly composed of methane gas, are regarded as one of the cleanest kinds of energy. Domestic and a few business connections utilize it for cooking, whereas industrial connections use it for heating.
• Over the past few years, the PNG connections across the country have increased significantly. According to the Ministry of Petroleum and Natural Gas, the number of PNG connections in the country was approximately 9.3 million in 2021, which has increased from 7.9 million in 2020. The growth, which was registered at approximately 18%, is expected to increase significantly during the forecasted period.
• Government measures to expand the use of natural gas as cooking gas to help reduce the number of people who suffer from health issues from the combustion of fossil fuels such as wood, coal, or cow dung will result in a growth in PNG connections over time. For example, in the past two years, 22 private providers have been authorized to provide PNG to houses by Petroleum and Natural Gas Regulatory Board (PNGRB). According to the "Minimum Work Programme," they are in the process of developing gas infrastructure.
• Furthermore, in August 2022, the government announced that after the completion of the 11A bidding round, 295 geographical areas had been allocated to various entities. The government announced that after this round, 98% of the population and 88% geographical area of the country had been covered for city gas distribution.

Increasing PNG Connections and CNG Stations are Expected to Drive the Market

• The city gas distribution market in India includes PNG and CNG segments. PNG connections are provided to various end-users like domestic, industrial, and commercial. At the same time, the CNG stations, also known as retail outlets, are installed at various places so that people can have access to natural gas for transport.
• After the completion of the 11 A bidding round in the country in August 2022, the government announced that it had covered 98% of the population compared to 96% in the previous round. This increase in the coverage area is expected to increase the number of PNG and CNG connections across the country.
• According to the Petroleum and Natural Gas Regulatory Board (PNGRB), in 2021, the total domestic connections in the country were around 9,302,667, while the commercial connections stood at 34,854, and the industry connections were around 13,215. Additionally, the number of CNG stations also increased in the country. As of 2021, there was a total of 4,433 retail outlets in the country.
• The Petroleum & Natural Gas Regulatory Board in India, under the Natural Gas Infrastructure in India "Vision 2030," has announced plans to increase the share of natural gas in the energy mix by 20% in 2025 as compared to 11% in 2010, which may increase the number of PNG connections and CNG stations in the country.
• The 11th CGD round awarded major contracts to Bharat Petroleum Corporation Limited (BPCL), Megha Enterprises (MEIL), Indian Oil Corporation (IOC), and Adani Total. a growth in the number of connections in the future is expected to drive the CGD market throughout the forecast period.

India City Gas Distribution Industry Overview

The India city gas distribution (CGD) market is moderately fragmented. The key players in the market (in no particular order) include Indraprastha Gas Limited, Mahanagar Gas Ltd, GAIL Gas Limited, Gujarat Gas Ltd, and IndianOil-Adani Gas Pvt. Ltd, among others

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