High Taxes Impeding Natural Gas Consumption Growth in India, Says Ex-GAIL Chief
Sandeep Kumar Gupta emphasizes that taxation, not infrastructure, hinders natural gas use in India. The country’s gas demand is projected to decline by 8% by 2026, contrasting with the goal of increasing gas's share in the energy mix.
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Former GAIL chairman Sandeep Kumar Gupta highlighted that India's existing gas infrastructure, including eight LNG import terminals operating at 50% capacity, is sufficient to meet demand. He stated that high taxes, particularly the 14% excise duty on CNG and the exclusion of natural gas from the GST regime, are the main barriers to increased consumption.
Currently, gas pipeline utilization is at 50-60%, and city gas distribution covers 307 areas. The International Energy Agency forecasts an 8% contraction in natural gas demand by 2026, complicating the government's aim to increase gas's energy mix share from 6% to 15%. Addressing taxation could enhance consumption significantly.
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