PNGRB’s Gas Vision 2040: High on ambition, light on ground reality – 10 Jun 2025

PNGRB's has just released an ambitious up to 2030 and then going on to 2040 gas demand report.

It is rich in data and ambition, but like most forward-looking regulatory documents, it's optimistic, technocratic, and leaves many real-world frictions unexamined.

Here is our take is

CGD to Dominate India’s Gas Future — But Is the Backbone in Place? PNGRB Claim: CGD will be the largest driver of gas demand by 2040 — accounting for up to 270 mmscmd. Our View: Nearly a third of GAs still lack pipeline connectivity. Without aggressive execution, this demand surge may not materialize.

LNG-Fuelled Trucking Revolution? Or Just Another Missed Bus? PNGRB Claim: India will have 5 lakh LNG trucks and 1000 fueling stations by 2040. Our View: From just 700 trucks and 20 stations today, the scale-up needs deep OEM, policy, and pricing alignment — none of which currently exist.

Refineries & Petchem to Double Gas Use — But Will Naptha Still Win? PNGRB Claim: Gas demand from this sector will grow from 22 to nearly 60 mmscmd by 2040. Our View: Gas will only be viable if it stays cheaper than naphtha and fuel oil — something long-term price trends can’t guarantee.

Fertiliser Growth Steady — But Import Substitution Still Unreliable PNGRB Claim: Fertiliser gas demand will remain stable, protected by subsidies and plant expansions. Our View: Plant-level outages, pipeline gaps, and policy shifts could undercut this stability — import substitution remains a fragile hope.

Power Sector to Support Peak Demand — But High Cost Still a Drag PNGRB Claim: Gas-fired power demand will more than double by 2040, driven by peaking needs. Our View: At over Rs 6/unit, gas power is too costly unless peaking markets or capacity payments emerge to justify its role.

I&C Sector Seen as Gas Growth Dark Horse — But Pricing Volatility Looms PNGRB Claim: Gas demand from SMEs and commercial units will grow 2–3x as they switch from FO, LPG, and diesel. Our View: These consumers are highly price-sensitive — any global LNG volatility or tax fluctuation could swing them back to liquid fuels.

Steel’s Shift to Gas Hinges on Green Mandates, Not Market Forces PNGRB Claim: Gas-based DRI will gain traction as green steel gains importance. Our View: Without carbon pricing or compliance mandates, coal-based sponge iron will remain dominant due to lower cost.

North-East Grid Expansion Is Promised — But Completion Remains Patchy PNGRB Claim: Projects like NEGG will unlock industrial demand in the North-East. Our View: NEGG is just 12% complete. Without faster execution, regional demand will lag for years.

CBG Ambitions Are High — But Execution Rates Are Embarrassingly Low PNGRB Claim: 5000 plants and 5% CBG blending with CNG/PNG by FY29. Our View: Only ~120 plants are operational. Logistics, financing, and connectivity challenges remain unresolved.

The Entire Projection Leans on LNG Below $9/MMBtu — A Global Gamble PNGRB Claim: CGD and LNG trucking demand hinge on steady, affordable LNG under $9. Our View: This assumption is risky — supply shocks or price spikes could derail India’s entire gas transition roadmap.