India's Oil and Gas Sector: Future Trends and Growth Prospects
Explore the anticipated growth and strategies for India's oil and gas industry, emphasizing consumption and investments.
India's oil and gas industry is poised for significant growth in the coming years, with new projections highlighting an upward trend in both oil and gas consumption. According to estimates from OPEC, India is likely to be at the forefront of global oil demand, with consumption expected to reach 5.74 million barrels per day (bpd) in 2025 and further climb to 5.99 million bpd by 2026.
Natural Gas Consumption Surge
The natural gas sector is not lagging either. By 2030, India's gas consumption is forecasted to increase by nearly 60%, achieving approximately 68,753 million standard cubic meters (MMSCM) in FY26, compared to 71,314 MMSCM the previous year. In terms of reserves, as of April 2025, India boasts around 672.07 million tonnes of crude oil and 1,073.01 billion cubic meters (BCM) of natural gas.
Rising Production and Throughput
Production figures are also showing positive trends. In FY26, crude oil production climbed to 27.95 million metric tonnes (MMT), while natural gas output registered a growth of 6.4%. Overall energy requirements and fuel consumption are on the rise, with crude oil throughput increasing from 255.23 MMT in 2022-23 to 261.55 MMT in 2023-24, reflecting a growth rate of 2.47%.
The public sector refineries have seen their crude oil throughput increase at a compound annual growth rate (CAGR) of 2.84%, going from 108.03 MMT in FY07 to 178.88 MMT in FY25. Private sector refineries have recorded an even stronger growth, with a CAGR of 5.64%, rising from 33.43 MMT to 89.73 MMT over the same period.
Investment and Policy Support
In order to drive energy security and encourage sustainability, the Indian government is actively expanding its natural gas pipeline network by 10,805 kilometers. Additionally, there are plans to increase ethanol blending to 20% by 2025, establish 80 Compressed Biogas (CBG) plants, and raise the refining capacity to 309.5 MMTPA by 2028.
The sector has greatly benefitted from substantial investments and exploration successes under initiatives like the New Exploration Licensing Policy (NELP) and the Open Acreage Licensing Policy (OALP). Before 2014, nine bidding rounds of NELP attracted investments exceeding Rs. 3,07,368 crore (approximately $36 billion), resulting in 177 discoveries in the oil and gas domain.
Expansion of City Gas and CNG Infrastructure
City gas companies are significantly advancing the gas sector with ventures in CBG and LNG, aiming for a production target of four tonnes per day from Narela. As part of their growth strategy, they plan to establish 50 new LNG stations and escalate natural gas's share in India’s energy mix from 6.5% now to 15% by 2030.
India is also targeting 126.3 million Piped Natural Gas (PNG) connections and 18,336 Compressed Natural Gas (CNG) stations by 2034. This ambitious plan is further supported by state-level policies that intend to increase CNG vehicle adoption by 25%. In the fiscal year 2024-25, more than 2.1 million new PNG connections were added.
Future Outlook and Infrastructure Growth
The oil and gas market in India is on a rapid growth trajectory. For instance, ONGC has initiated over 45 new exploration and development wells early in 2025, and capacities at the Dabhol LNG terminal are set to increase from 5 to 6.3 MMT per annum.
With sustained efforts to boost natural gas’s contribution to the energy mix—from the current 6% to a targeted 15% by 2030—India is not just enhancing its energy security, but also paving the way for a more sustainable energy future.
