Gas consumption faces price volatility risks

Price structure constraints are expected to challenge India's target of increasing natural gas share in the overall energy basket to 15 percent by 2030, from 6 percent in 2017, despite resilient demand from city gas distribution networks and rising domestic production, Fitch Ratings said.

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Progress on the target has been minimal - 6 percent share in 2021 - as the natural gas growth has not managed to outpace total energy demand growth. Demand for natural gas from price-sensitive industrial and power sectors may be limited in times of rising prices, as they switch to cheaper alternate fuels, Fitch Ratings said in a report on Tuesday.

"The pace of adoption of gas for mobility and household fuel may also slow in times when its price benefit against alternate fuels decreases," it said.