A sharp rise in electricity demand pushed trading volumes on the Indian Gas Exchange (IGX) to one of their strongest levels on record in May, with spot gas trade surging 130.39% year-on-year and 26.01% month-on-month to 10.75 million MMBtu (271.12 MMSCM), highlighting the growing role of market-based gas procurement in meeting peak energy demand.
The surge was largely driven by higher fuel requirements from the power sector as temperatures climbed across several parts of the country, boosting demand for gas-based generation and spot gas procurement.
Pricing Dynamics
The strong demand was accompanied by a sharp rise in gas prices. The exchange’s benchmark index — GIXI — climbed to ₹1,768 per MMBtu ($18.49/MMBtu) in May, up 12.11% from April and a steep 73.91% higher than a year ago, reflecting tighter market conditions and increased consumption.
Structural Supply Mix
Of the total traded volume, around 40.10% comprised domestic HPHT gas sold at the government-notified ceiling price and purchased primarily by city gas distribution (CGD) companies to meet demand for domestic PNG and transport CNG. The remaining 59.90% consisted of free-market gas.
The exchange recorded physical deliveries of 9.76 million MMBtu, equivalent to approximately 7.94 MMSCMD, underlining the growing acceptance of exchange-traded gas as a procurement route for consumers.
Domestic gas producers also stepped up participation. Nearly 17.96 MMSCM of gas with pricing freedom was traded through the exchange from production sources including Bokaro CBM, Jaya, Suvali and Hazira-ONGC, indicating increasing liquidity in domestically produced gas.
Regional benchmarks reflected the broader rise in gas prices. GIXI-West stood at ₹1,775 per MMBtu ($18.57/MMBtu), largely in line with the all-India benchmark, while GIXI-East traded at a 16.93% discount. The GIXI-Dahej benchmark rose 15.83% month-on-month to ₹1,763 per MMBtu ($18.4/MMBtu).
Despite the increase, GIXI-Dahej remained 10.86% below the settled WIM-Ex Dahej price for May, indicating that exchange-traded gas continued to offer a competitive alternative to some LNG-linked supplies.
The month also saw increased market participation, with Trafigura India Private Limited joining as a proprietary member, taking the total number of registered members on IGX to 55.
IGX currently facilitates trading across 18 delivery points, including six LNG terminals, nine domestic gas field landfall points and three pipeline interconnections, providing nationwide market access.
The sharp rise in traded volumes and benchmark prices underscores how India’s gas market is increasingly turning to exchange-based trading to balance demand and supply, particularly during periods of elevated power consumption and shifting fuel requirements.