India’s natural gas ecosystem remains under strain, with lower domestic production and flat liquefied natural gas (LNG) imports constraining overall availability even as consumption from key sectors continues to edge higher, data from the Petroleum Planning & Analysis Cell (PPAC) Monthly Gas Report for December 2025 shows. The numbers underline a widening structural gap between India’s gas demand ambitions and supply realities, raising fresh questions over the country’s push to increase the share of gas in its energy mix.
Gross domestic natural gas production in December 2025 fell to 2,937 million standard cubic metres (MMSCM), a 4.2% year-on-year decline, driven by lower output from ageing fields operated by ONGC and private producers. After accounting for internal consumption, flaring and losses, net gas production available for sale declined to 2,446 MMSCM, down 4.6% from the year-ago period.
Production Paradox
LNG imports during the month stood at 2,808 MMSCM, marginally lower by 0.7% year-on-year, indicating that India did not materially step up spot LNG purchases despite weaker domestic output. As a result, total natural gas available for sale dropped 2.6% year-on-year to 5,254 MMSCM in December, tightening supply at a time when sectoral demand was rising.
Even as availability slipped, gas consumption rose to 5,703 MMSCM in December, reflecting steady offtake from priority and urban sectors. Fertilisers continued to dominate gas usage, accounting for 29% of total consumption, followed by city gas distribution (CGD) at 23%, power generation at 11%, refineries at 9%, and petrochemicals at 6%.
CGD demand emerged as a key growth driver, rising 8.1% y-o-y, supported by the expansion of PNG household connections and increased CNG use in transport. Power sector gas consumption jumped 16.5% y-o-y in December, reflecting short-term dispatch during power demand spikes. However, cumulative consumption over April–December FY25 remains lower, underscoring the sector’s sensitivity to gas prices and supply availability.
Petrochemical consumption rose 9.3% y-o-y, while fertiliser demand remained broadly stable, reinforcing its position as the most protected segment in India’s gas allocation framework.
Demand Dynamics
The December data once again highlights the difficulty of reviving domestic gas output. ONGC accounted for about 37% of gross production, while private and joint venture operators contributed roughly 41%, with the remainder coming from OIL. Production declines were evident across operators, reflecting maturing fields and slower-than-expected gains from newer developments.
Notably, only around 83% of gross production translated into net gas available for sale, with the remainder absorbed by internal consumption, flaring and losses — pointing to persistent efficiency constraints that continue to limit supply flexibility.
Gas consumption remains heavily concentrated in a few industrial and urban states. Gujarat emerged as the largest gas-consuming state at 42.9 MMSCMD, followed by Uttar Pradesh at 32.7 MMSCMD and Maharashtra at 27.5 MMSCMD.
Together, these three states account for a substantial share of national gas demand, reflecting the clustering of fertiliser plants, refineries and CGD networks.
The December numbers reinforce a recurring theme in India’s gas transition: demand growth continues to outpace domestic supply, pushing the system towards greater reliance on LNG at a time when global prices remain volatile and geopolitical risks elevated.
While fertilisers and CGD together absorb more than half of available gas, the scope for sustained gas-based power generation remains structurally constrained, keeping coal and renewables central to India’s electricity mix. Analysts say a meaningful improvement in gas availability will require a combination of upstream production revival, pricing reforms to incentivise output, and long-term LNG contracting to reduce exposure to spot market volatility.