LPG subsidy stalling natural gas transition: Think Gas COO

CHENNAI: With Rs 8,000 crore already invested, City Gas Distributor Think Gas is gearing up to invest another Rs 10,000 crore over the next five years to expand its natural gas infrastructure across India.

However, the merged entity of AG&P Pratham and Think Gas says conflicting government subsidies are hindering progress, particularly the continued support for LPG despite natural gas being cleaner and more cost-effective.

Think Gas director-COO Chiradeep Datta has called for urgent policy clarity to support India’s clean energy goals, urging the government to choose between subsidising LPG or promoting natural gas.

Speaking at a media interaction in Chennai on Wednesday, Datta said the continued subsidy for LPG was distorting the market, even though natural gas is already 15 per cent cheaper. “Either you promote LPG or you promote natural gas. You cannot promote both,” he said, noting that “you’re increasing your subsidy burden, while natural gas is available at a discount.”

He suggested that if subsidies are politically necessary, they should be extended to natural gas users, especially those from weaker economic backgrounds. “If Ujjwala is for the poor, why limit it to LPG? People using piped natural gas (PNG) can be from the same group. Extend the benefit.”

With the Ennore–Tuticorin pipeline now operational, TN, once a laggard in natural gas adoption, is witnessing rapid growth. Companies like SPIC have switched from naphtha to gas, and demand is surging across sectors. “TN was a sleeping market. But now, every industry — even brick kilns and bus depots — wants gas,” Datta sought to point out. “The government is giving land for CNG stations to fuel public buses.”

On the residential adoption and the challenges, Datta acknowledged that household PNG adoption is slower due to LPG subsidies, but urban interest is growing. “In Chennai’s OMR high-rises, people are asking when pipelines will reach them,” he said, while calling upon LPG distributors to partner in marketing PNG rather than viewing it as competition.

Dwelling on the rise of electric vehicles (EVs), Datta warned against a one-sided narrative. “EVs will grow, but are we ready? The grid can’t handle massive load, there’s no regulation for battery disposal, and many battery materials are carcinogenic.”

While welcoming EV progress, he stressed the need for balanced regulation, noting that EVs, unlike gas, remain largely unregulated. “EVs seem green and futuristic, but the challenges will slow them down. Natural gas can be a key bridge fuel if policies align with market realities.”

Datta also spoke about the strategic alliance with ABB India following the successful commissioning of its ABB Ability SCADAvantage solution for Think Gas, enabling end-to-end automation and digitalisation of their CGD network spanning ten Indian states.

The network spans 19 geographical areas across Andhra Pradesh, Bihar, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh, and TN, comprising 500-plus CNG stations, approximately 5,50,000 registered D-PNG connections, and around 17,000 inch-km of steel pipeline connecting industrial and commercial establishments. Think Gas is the recipient of the largest foreign direct investment in greenfield CGD business in India. Marquee investors include I-Squared Capital, Osaka Gas, JOIN, Sumitomo Corporation and Konoike Transport.