LNG consumption declines 6.5%on costly import, lower output
New Delhi: A surge in global LNG prices due to the Iran war, coupled with declining domestic output, is dragging down India's natural gas consumption.
Gas consumption fell 6.5% year-on-year in the April-June quarter to 16 billion cubic meters (bcm), according to oil ministry data. Domestic output declined 4.3% to 8.3 bcm as production from Reliance Industries' and ONGC's fields fell, while LNG imports dropped 8.6% to 7.7 bcm as soaring spot prices made imports unaffordable for some customers.
India depends on imports for half of its gas consumption, with the majority of LNG supplies coming from Gulf countries. The war disrupted those supplies, increasing reliance on cargoes from elsewhere. Most LNG is procured under long-term contracts, with only a small share sourced from the spot market.
The war cut off supplies from Qatar, India's largest LNG supplier under a long-term contract, forcing Indian buyers to seek more expensive alternatives. Dependence on spot purchases has risen even as prices have skyrocketed.
Gas consumption fell 6.5% year-on-year in the April-June quarter to 16 billion cubic meters (bcm), according to oil ministry data. Domestic output declined 4.3% to 8.3 bcm as production from Reliance Industries' and ONGC's fields fell, while LNG imports dropped 8.6% to 7.7 bcm as soaring spot prices made imports unaffordable for some customers.
India depends on imports for half of its gas consumption, with the majority of LNG supplies coming from Gulf countries. The war disrupted those supplies, increasing reliance on cargoes from elsewhere. Most LNG is procured under long-term contracts, with only a small share sourced from the spot market.
The war cut off supplies from Qatar, India's largest LNG supplier under a long-term contract, forcing Indian buyers to seek more expensive alternatives. Dependence on spot purchases has risen even as prices have skyrocketed.
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