-
CRISIL’s latest report highlights rapid CNG infrastructure growth, new market opportunities, and the sector’s pivotal role in India’s clean energy transition.
India’s city gas distribution (CGD) sector is poised for a significant leap, with compressed natural gas (CNG) emerging as a central pillar in the country’s energy transition, according to the latest ‘City Gas Pulse’ report by CRISIL Intelligence.
The report highlights that government policies, surging urban mobility demand, and rapid infrastructure expansion are fueling the sector’s growth. Over 18,000 new CNG stations are proposed nationwide, while recent licensing rounds have unlocked access to 12 crore households, setting the stage for substantial market expansion.
While leading states continue to anchor demand, the next phase of growth is expected to come from new geographies, driven by evolving gas allocation patterns, increased private investment, and a surge in vehicle conversions. However, the report notes that competition is intensifying as exclusivity periods for operators expire and infrastructure gaps are selectively addressed.
CRISIL’s analysis offers a detailed state-wise and company-wise view of CNG demand, infrastructure rollout, investment concentration, and market readiness. The report underscores CNG’s growing role in India’s energy mix, as the country targets raising natural gas to 15% of its primary energy portfolio.
Regional infrastructure development and readiness remain key to expanding gas access, even as electric vehicles gain traction. Despite evolving allocation norms and pricing pressures, CNG continues to be seen as a cleaner, economically viable alternative to conventional fuels.
India’s CGD sector expansion aligns with national climate commitments, including the goal to achieve net-zero emissions by 2070. The momentum in CNG adoption is expected to complement broader efforts in energy diversification and climate action.
