India's Gas Demand Recovers to Pre-Disruption Levels Amid Growing Global LNG Competition: Equirus

India’s natural gas consumption recovered to nearly pre-disruption levels in June 2026, showing a broad-based improvement in demand across several key sectors. However, the recovery could face pressure from rising competition for liquefied natural gas (LNG) in international markets and elevated spot prices, according to a research report by Equirus.

India’s total gas consumption rose 7 per cent month-on-month and 2 per cent year-on-year to 197 million metric standard cubic metres per day (mmscmd) in June. Even after excluding demand from the power sector, consumption increased 7 per cent from May and 4 per cent compared with the same period last year, reaching 176 mmscmd. The figures indicate that the recovery in gas demand is becoming more broad-based rather than being driven by a single sector.

Imported gas was the main contributor to the increase. LNG consumption jumped 13 per cent month-on-month and 10 per cent year-on-year to 110 mmscmd. Domestic gas supplies, meanwhile, remained unchanged from the previous month at 87 mmscmd and were down 8 per cent compared with June 2025. This pushed India’s dependence on imported gas to 56 per cent.

Equirus also pointed to a significant revision in the May data, which has changed the assessment of the pace of recovery. Gas consumption for May was revised upwards to 184 mmscmd from the earlier estimate of 169 mmscmd, while LNG consumption was revised to 97 mmscmd from 83 mmscmd. The revisions suggest that demand had already recovered more strongly than previously estimated before the June increase.

Growth during June was spread across several segments. City gas distribution remained one of the largest contributors, with consumption increasing by 2.3 mmscmd from the previous month to 58 mmscmd. Demand from miscellaneous users rose by 3.9 mmscmd to 41 mmscmd, while refinery consumption increased by 2.6 mmscmd to 15 mmscmd. The refinery segment also benefited from a 25 per cent increase in imports. Fertiliser and power-sector consumption recorded improvements as well, while petrochemical demand recovered to 7 mmscmd. Despite the recovery, petrochemical consumption remained significantly below its year-earlier level.

The brokerage expects gas demand to remain healthy in July, although consumption could be slightly lower than June because of a moderation in power-sector demand. A further weakening is possible in August, when lower consumption from the Morbi cluster and seasonal factors could affect overall demand. At the same time, India’s LNG sourcing strategy has undergone a notable change. The country imported around 7 million tonnes of LNG between May and July, representing a 15 per cent increase from the corresponding period a year earlier. The increase came despite a sharp 91 per cent decline in LNG supplies from Qatar. The United States became the largest supplier during the period, followed by Nigeria and Oman, helping India diversify its sources and reduce its immediate dependence on Qatari cargoes.

The international LNG market remains challenging. Equirus said stronger LNG buying by China is increasing competition for flexible cargoes, potentially making it more difficult and expensive for other Asian buyers to secure supplies. Asian spot LNG prices moved above USD 19 per million British thermal units in July and have since risen beyond USD 20. European gas storage levels also remain below historical averages, adding to concerns about global supply-demand conditions.

The commissioning and ramp-up of new LNG projects around the world could eventually improve the availability of gas and provide some relief to buyers. However, the brokerage cautioned that shipping constraints, sanctions and payment-related risks could influence whether additional supplies actually reach countries such as India at competitive prices.

For India, the latest figures provide a positive signal for the domestic gas market, with demand returning close to earlier levels and growth becoming more widespread across industries. Yet, with more than half of consumption now dependent on imported gas, international LNG prices and supply conditions will remain crucial. The ability to secure reliable LNG at affordable prices could ultimately determine whether the current recovery develops into sustained growth in India’s natural gas market.