• Natural gas consumption declined -3% YoY in FY2026 due to a moderation in offtake across all sectors, barring CGD and petrochemicals. The CGD sector witnessed a 9.3% YoY growth, while petrochemicals rose ~18% YoY. Gas consumption in FY2027 is expected to moderate by 15-20% YoY amid the West Asia crisis.
• LNG prices witnessed a sharp rise post the West Asia crisis as 20% of the global LNG capacity was disrupted. While the prices have moderated sharply following the announcement of discussions between the US and Iranian administrations, the successful signing of a peace deal and normalisation of trade flows through the Strait of Hormuz (SoH) will remain a key driver of LNG prices.
• Domestic gas prices have risen with the APM price ceiling now at $7/MMBTU, while NWG price witnessed a sharp uptick amid the rise in crude oil prices. With the recent softening of crude oil prices, NWG prices are expected to moderate in July 2026.
• The sector’s capex intensity is expected to remain high as investments are likely to continue in CGD infrastructure, gas pipelines and petrochemical capacities over the next three years.

Exhibit: Trend in global LNG prices ($/MMBTU)

Source: Oilprice.com, ICRA Research