Domestic natural gas consumption has slowed as local production falls, imports remain expensive and the demand for gas-based electricity declines.
Gas consumption rose just 0.6% year-on-year in February, compared to a 9.1% increase in the April-February period, according to oil ministry data.
The strong growth earlier this year was primarily driven by the dramatic rise in gas use by generators to meet peak electricity demand during the scorching summer last year, an industry executive said. However, as temperatures cooled, gas demand from the power sector sharply declined, he added.
National gas consumption rose 16% year-on-year in May, expanded to 23% in June, and 24% in July. The festive season also helped push gas demand up by 16% in October. But in other months, the demand growth was only 3- 4%.
The power sector’s share of national gas consumption was 19% in May, when generators consumed the highest volume in any month this fiscal year. The share fell to 9% in November, when power plants consumed the lowest volume this year. Imports contributed significantly to the power sector’s consumption.
The fertiliser sector is the largest user of gas. Since fertiliser is subsidised by the government, fertiliser makers can use expensive imported liquefied natural gas (LNG) in large quantities. Other industries reduce their gas consumption and switch to liquid fuels like propane and fuel oil when international LNG prices are high.
