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Natural Gas Demand Comes Down By 10 -12% In Current Fiscal: Crisil

The Ministry of Petroleum has increased the prices of natural gas by a record 40 per cent on 30 September

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According to the report of rating agency Crisil, industrial consumers are shifting to other cheaper fuels, due to which the demand of natural gas has come down by 10 to 12 per cent in the current financial year. 

Natural gas prices have so far jumped 150 per cent during the current financial year. Due to this, the increase in the demand of LPG can be reduced to 8 to 10 per cent instead of 20 to 25 per cent.

The Ministry of Petroleum has increased the prices of natural gas by a record 40 per cent on 30 September, in line with the jump in energy prices globally. Earlier, during April-September, the price of gas was increased by 110 per cent. According to an order issued by the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum, the rate to be paid for gas produced from old gas fields has been increased from the current USD 6.1 per million British thermal unit (MBtu) to USD 8.57 per MBtu.

According to Navin Vaidyanathan, Director, Crisil, the demand for industrial PNG is expected to come down by 10-12 per cent in the current financial year due to higher gas prices. Price sensitive industrial consumers switch to alternative fuels such as propane and fuel oil following the rise in gas prices.

He said the demand for PNG to be used in homes could grow at a very low rate of 2 to 5 per cent with people returning to offices. On the other hand, despite the narrowing of the price differential with petrol and diesel, the demand for CNG is still expected to grow by 25 to 30 per cent due to the expanded network of CNG stations.

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