RoydadNaft –  India could reduce its crude oil import bill by around $1 billion annually if 10% of diesel used in transportation is replaced with liquefied natural gas (LNG), a new study by the Petroleum and Natural Gas Regulatory Board (PNGRB) has found. The regulator is making a strong push for greater LNG adoption, particularly in heavy-haul transport.

The study estimates that 30-40% of the country’s diesel vehicles—including inter-city buses, intra-city buses, mining equipment, and heavy trucks—could realistically transition to LNG within the next five to seven years. Such a shift would substantially lower India’s reliance on imported crude oil.

Replacing 10% of diesel consumption would displace about 6.2 million tons of diesel, equivalent to roughly 5.9 million tons of LNG. At current Brent crude prices and typical $60-per-barrel-linked LNG contracts, this substitution would cost around $2.5 billion but deliver savings of 22-30%, resulting in the $1 billion annual reduction in import costs.

For consumers, the switch could generate savings of approximately ₹14,000 crore (about $1.7 billion) per year, driven by a per-unit advantage of ₹528 per million British thermal units (mBtu). The PNGRB noted that purchasing decisions in this sector are largely influenced by day-to-day operating costs.

Current LNG use in India’s transport sector stands at around 50,000 tons per year. However, with supportive policies and expanding gas infrastructure, the market could grow dramatically to six million tons per year by 2030, positioning LNG as a competitive alternative fuel.