ICRA Sees FY27 Gas Demand Falling 15%-20% as West Asia Crisis Disrupts 20% of LNG Capacity
Updated
Updated · Deccan Chronicle · Jul 2
ICRA Sees FY27 Gas Demand Falling 15%-20% as West Asia Crisis Disrupts 20% of LNG Capacity
1 articles · Updated · Deccan Chronicle · Jul 2
Summary
FY2027 natural gas consumption is projected to drop 15%-20%, ICRA said, after demand already slipped 3% in FY2026.
A 20% disruption to global LNG capacity during the West Asia crisis squeezed supplies and drove up LNG prices, pressuring consumption across most sectors.
FY2026 weakness was broad-based, though city gas distribution grew 9.3% and petrochemicals rose 18%, partly offsetting declines elsewhere.
LNG prices have eased after US-Iran talks were announced, but ICRA said a full return to pre-war pricing and supply conditions could take a couple of quarters as damaged facilities recover.
Domestic gas costs also remain elevated, with the APM ceiling at $7 per MMBtu, although new well gas prices are expected to soften in July 2026 as crude retreats.