About the Gas Distribution Sector
The Gas Distribution or the City Gas Distribution (CGD) sector in India refers to the network of companies responsible for distributing Piped Natural Gas (PNG) and Compressed Natural Gas (CNG) to households, industrial units, and commercial establishments across the country. CNG is primarily used as auto-fuel, and PNG is used in domestic, commercial and industrial segments.
In the last few years, the PNG connections in India have grown significantly. As per the Ministry of Petroleum and Natural Gas, in 2021, the number of PNG connections in India was approximately 9.3 million, which has grown from 7.9 million in 2020.
Future Outlook of the Gas Distribution Sector in India
The Indian Government’s measures to increase the usage of natural gas for cooking to help reduce the number of people who suffer from health issues from the release of fossil fuels such as coal, cow dung or wood will result in a boost in PNG connections over time. The Government's intention to convert India into a gas-based economy is expected to raise the natural gas share in its energy mix from 6% in 2019 to 15% by 2030. This is anticipated to create huge opportunities for India's CGD market.
Things To Consider Before Investing in the Gas Distribution Sector
- Regulatory Environment: Evaluate the regulatory landscape governing gas distribution. Keep yourself updated on the government policies related to the gas sector. Policies can influence pricing, subsidies, and overall market dynamics.
- Market demand: Understand the current and anticipated demand for gas in the target market. Stay informed about industry trends and emerging technologies. Also, assess the existing infrastructure and expansion plans of the gas distribution companies. Consider their capacity to meet growing demand.
- Environmental conditions: Given the nature of the gas industry, adherence to environmental and safety standards is crucial. Evaluate companies' commitment to these standards.
How To Invest in Gas Distribution Sector Stocks?
Investing in gas distribution stocks via Angel One is easy. Simply follow these steps:
- Log in to your Angel One account.
- Click on the search icon and look for your desired gas distribution sector stock.
- Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
- To complete your transaction, click on the ‘Buy’ button.
If you don’t have a Demat account with Angel One, you can open one for free online within minutes.
