India gas demand challenge: Cheap LNG fails to unlock structural demand
India gas demand challenge is increasingly defined by structural inefficiencies rather than pricing, indicating that the India gas demand challenge cannot be resolved through cheaper LNG alone. According to Indian Petroplus analysis, infrastructure gaps and market design constraints continue to limit demand growth despite global price fluctuations.
The India gas demand challenge stems from the disconnect between supply availability and demand accessibility. While LNG import capacity has expanded, downstream pipeline connectivity remains uneven, preventing gas from reaching key consumption centres. Indian Petroplus notes that terminals act as entry points, but without integrated networks, utilisation remains constrained.
Low pipeline utilisation is further intensifying the India gas demand challenge. With utilisation levels around 40–50%, higher tariffs increase delivered gas costs, reducing competitiveness against alternate fuels. This creates a feedback loop where weak demand and high costs reinforce each other.
Another key factor shaping the India gas demand challenge is the delivered cost structure. Regasification charges, transmission tariffs, and regulatory inefficiencies continue to inflate end-user prices. Indian Petroplus analysis highlights that lower LNG prices alone cannot offset these systemic costs.In summary, the India gas demand challenge reflects a structural issue where infrastructure, pricing mechanisms, and policy alignment are critical to unlocking sustained demand growth, India Gas Demand, LNG India, Cheap LNG, Gas Market India, Energy Demand India, Natural Gas Market.