Expansion Of City Gas Distribution Driving India's Energy Transition: Crisil

2025-06-23 02:18:24

(MENAFN- KNN India) New Delhi, Jun 23 (KNN) The City Gas Distribution (CGD) sector is emerging as a key pillar in India's energy transition, with compressed natural gas (CNG) at the forefront of this momentum, according to a recent report by Crisil Intelligence.

Titled 'City Gas Pulse', the report highlights how government policies, rising urban mobility demand, and expanding infrastructure are driving the sector's growth trajectory.

With over 18,000 CNG stations proposed and access to 12 crore households enabled through successive licensing rounds, the CGD sector is poised for substantial expansion.

While major states continue to dominate demand, the next wave of growth is expected to stem from emerging geographies, bolstered by changing gas allocation patterns, rising private investment, and accelerating vehicle conversions.

However, the report also underscores the increasing competitive intensity in the market.

As exclusivity periods granted to CGD operators expire and infrastructure gaps are gradually addressed, the sector is transitioning into a more dynamic and contested space.

Crisil's analysis provides detailed insights into state-wise demand trends, infrastructure rollout status, investment distribution, and market readiness.

CNG is increasingly viewed as a central component of India's evolving energy mix, especially as the country aims to raise the share of natural gas to 15 percent in its primary energy portfolio.

The report points to regional infrastructure development and operational readiness as key enablers in broadening gas access, even as the market also contends with a growing shift toward electric vehicles.

Despite evolving gas allocation norms and pricing pressures, CNG retains a competitive edge as a cleaner and economically viable fuel alternative.

India remains heavily reliant on fossil fuels to meet its energy needs, but the shift toward cleaner sources has gained considerable momentum.

The expansion of CNG is seen as complementary to broader efforts in climate action and energy diversification.

(KNN Bureau)

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