For as long as PPAC’s sectoral series has run, fertiliser plants were India’s biggest burners of natural gas. In the first quarter of FY2026-27 that ended: city gas distribution — the CNG in vehicles and PNG piped into kitchens — consumed 4,964 million standard cubic metres against fertiliser’s 4,703, leading in May and June individually. The crossover happened inside a shrinking pool, on a gas supply that is now majority imported.
Natural gas · City gas distribution · Fertilisers
City Gas Just Became India’s Largest Gas Consumer
Published · v1.0.0 · PPAC sectoral consumption workbooks (FY2015-16 → Q1 FY2026-27, provisional) · PPAC Snapshot of India’s Oil & Gas Data, July-26 edition
A decade of who burns India’s gas
Consumption grew 44%. Over half of that growth was city gas.
India’s natural gas consumption rose from 47,849 to 69,048 MMSCM between FY2015-16 and FY2025-26. The composition of that demand changed far more than its size: CGD tripled from 5,464 to 16,516 MMSCM — 11.4% of the pool to 23.9%, and 52% of all incremental demand over the decade — while gas-fired power fell outright, from 10,889 to 7,960 MMSCM, its share halving from 22.8% to 11.5%.
Exhibit 1
Sectoral gas consumption, FY2015-16 vs FY2025-26
Consumption including internal use; FY2025-26 is provisional. Sorted by end-decade size.
| Sector | FY2015-16, MMSCM | FY2025-26, MMSCM | Share then, % | Share now, % |
|---|---|---|---|---|
| Fertiliser | 16,135 | 19,649 | 33.7 | 28.5 |
| City gas distribution | 5,464 | 16,516 | 11.4 | 23.9 |
| Other / miscellaneous | 4,298 | 9,716 | 9.0 | 14.1 |
| Power | 10,889 | 7,960 | 22.8 | 11.5 |
| Refinery | 5,077 | 5,526 | 10.6 | 8.0 |
| Petrochemical | 3,733 | 3,899 | 7.8 | 5.6 |
| All sectors | 47,849 | 69,048 | 100 | 100 |
PPAC, Natural Gas Historical Sectoral Consumption workbook (NG-H), FY2015-16 to FY2025-26 (P). Remaining sectors — pipeline internal use, manufacturing, industrial, LPG shrinkage, sponge iron/steel, tea plantation — total 5,783 MMSCM in FY2025-26 and are omitted from the table, not from the totals. PPAC notes a sector-classification change from FY2020-21 onward, which inflates “Other/Misc” comparability across the break.
The crossover, month by month
April 2026 was the first month; May and June confirmed it; the quarter settled it.
Exhibit 2
CGD vs fertiliser vs power, Q1 FY2026-27
Monthly consumption, provisional.
| Month, 2026 | CGD, MMSCM | Fertiliser, MMSCM | Power, MMSCM |
|---|---|---|---|
| April | 1,482 | 1,400 | 624 |
| May | 1,734 | 1,648 | 642 |
| June | 1,748 | 1,655 | 641 |
| Quarter | 4,964 | 4,703 | 1,907 |
PPAC, Natural Gas Current-Year Sectoral Consumption workbook (NG-C), FY2026-27 sheets, provisional. In the annual series CGD was still second in FY2025-26 (16,516 vs fertiliser’s 19,649), so Q1 FY2026-27 is the first sustained period with CGD on top — a quarter is not yet a fiscal year, and a strong Rabi fertiliser season could still flip individual months back.
What makes the crossover structural rather than cyclical is what each side is doing: in FY2025-26, within a national pool that shrank 3.0%, CGD grew +9.7% while fertiliser fell 4.1% and power fell 10.5%. CGD is the only large sector still compounding — and the infrastructure behind it explains why: 8,980 CNG stations and 1.73 crore domestic PNG connections as of 31 May 2026, with Maharashtra (45.0 lakh) and Gujarat (39.0 lakh) alone holding nearly half the country’s piped-gas kitchens.
Who is exposed to the import price
The two biggest burners buy very different gas.
India’s gas is now majority imported: RLNG supplied 51.5% of consumption in FY2025-26 and 52.7% in Q1 FY2026-27, with PPAC putting overall import dependency at roughly 50% in both FY2024-25 and FY2025-26. But that dependency is not evenly spread:
- Fertiliser runs on imported gas: 87% of its June 2026 burn was RLNG (1,446 of 1,655 MMSCM). Every dollar on the LNG price flows through urea production cost into the fertiliser subsidy — the same channel this blog traced in the fertiliser subsidy piece. The state’s largest gas consumer until this quarter was, in effect, a fiscal LNG position.
- CGD is half-and-half: 49% RLNG in June 2026 (850 of 1,748 MMSCM), the rest domestic gas — much of it allocated at the administered domestic price. As CGD’s share grows, the tug-of-war over cheap domestic gas allocation between kitchens, vehicles and fertiliser plants becomes the sector’s central policy question.
- The supply side is not growing to meet it. Gross domestic production was 36,113 MMSCM in FY2024-25 and 34,776 in FY2025-26 — falling — and LNG terminal capacity runs far ahead of use: 53.5 MMTPA installed, with Dahej at 91.9% utilisation in Apr–Jun 2026 while Kochi ran at 26.3% and Dabhol at 39.2%. India’s LNG buying happens in the same global market Europe just cornered.
What this means
Three consequences, one per constituency.
- For gas policy: the marginal molecule now goes to a consumer sector with millions of retail price-takers, not a handful of plants with negotiated allocations. Domestic-gas allocation priority for CGD, decided administratively, is now the single biggest lever over urban fuel bills.
- For the fertiliser budget: losing the top-consumer slot changes nothing about exposure — at 87% RLNG-fed, the subsidy bill remains an LNG derivative, and a shrinking domestic allocation makes it more so.
- For the “stranded assets” ledger: gas power’s decade — share halved, absolute burn down 27% against a fleet that was built for far more — is the same build-ahead-of-demand pattern this blog has documented in LNG terminals and ethanol distilleries. The gas-fired fleet is the oldest member of the club.
Related — gas & LPG. Thermal Parity Is Dead · LPG's Missing Number · Europe Bought a Record Amount of LNG · The CBG Incentive Stack.
Sources. Sectoral consumption — PPAC, Natural Gas Historical Sectoral Consumption workbook (FY2015-16 → FY2025-26, provisional; sector reclassification noted at FY2020-21) and Current-Year Sectoral Consumption workbook (monthly, Q1 FY2026-27, provisional), both downloaded from ppac.gov.in, read 8 August 2026. Headline gas balance, import dependency (~50%), production (36,113 → 34,776 MMSCM), LNG terminal capacity (53.5 MMTPA) and utilisation, and CGD infrastructure (8,980 CNG stations; 1,72,55,095 domestic PNG connections as of 31.05.2026, source PNGRB) — PPAC, Snapshot of India’s Oil & Gas Data, Monthly Ready Reckoner, July-26 edition (data for June 2026), Tables 18, 21 and 22 and the month’s highlights. All shares and growth rates computed from these tables; the two provisional series differ by ~0.4% on the FY2025-26 total and are cited separately where used. MMSCM = million standard cubic metres; PPAC’s conversion is 1 MMT LNG = 1,325 MMSCM.
About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.
