Best Gas Stocks In India To Buy In 2024

Crude Oil and gas is one of the most precious resources found on earth as it is an important component of the energy industry. The energy sector of an economy is termed as its driving force and is critical for its functioning. It consists of the Oil and Gas Industry, coal mining industry, power generation industry and the power distribution industry.
Crude Oil is one of the most precious resources found in the earth’s crust and is of critical importance to the energy industry. Oil and Gas consists of products extracted from crude oil through the process of oil drill. Upon extraction, crude oil is further refined into petroleum products such as petrol, diesel, kerosene, and aviation turbine fuel. 

Apart from fulfilling the energy needs of a country, crude oil also takes care of its consumption needs as it is an important component in creating plastic, paints, lubricants and asphalt.

 

Learn to read candlestick chart pattern from best stock market course

 

How does the Oil and Gas Industry work?

Oil and Gas sector company works in three parts:

1). Finding the Oil (Upstream): It is a process where companies find oil underground and then extract it from out of the ground. It's considered to be a high risk and capital-intensive business and takes a substantial time because they use high-end technology for drilling and finding oil. Indian companies such as ONGC are into this.

 

 2). Moving the Oil (Midstream): Once the oil is extracted from the ground, it needs to travel places to put it to use.  Companies working in this industry store the oil, ship it to different places in trucks and pipelines, and controls big storage tanks. It's generally comparatively a less risky business than finding the oil. Companies like IOCL and GAIL are into this business.

 

3). Using the Oil (Downstream): This is the last step of the process of the oil and gas industry, where big companies take the converts the raw oil into useful things like gasoline, diesel fuel, and even plastic which is further sold to the consumers in the market. Companies like IOCL and Reliance are involved in this business.

 

Stats related India’s Oil and Gas Industry

-    India consumes lot of energy, especially oil and is ranked 3rd in the world in this regard.
-    As of 2021, India is Asia's second-biggest oil refiner engaged in turning crude oil into usable products such as petrol, diesel, gasoline. The country wants to elevate this by 40%, aiming to refine more quantity of oil by 2040.
-    Private companies in India own over a third of India's oil refining capabilities.
-    India's energy needs is expected to double by 2040.
-    In the past years (around 2020), India's energy use rose by 4.5%.
-    While India uses a lot of oil, it doesn't produce much itself. Oil production actually went down a little bit between 2020 and 2021.
-    Overall, India has some oil reserves underground (around 4.7 billion barrels), but it needs to import most of the oil it uses.

 

India Gas stocks in focus in 2024

Here is the list of of best natural gas stocks in India, make sure before investing in these stocks investor should know how to choose stocks for long term investments by analyzing important ratios in the stock market.

 

1). Gas Authority of India Limited (GAIL)

GAIL Limited is a prominent player in bringing natural gas to people and businesses all over India. They have a gigantic network of pipelines for natural gas across the country stretching over 15,583 kilometers. This makes them a leading force in the gas sector, controlling roughly half of all gas trading and an impressive 70% of transporting gas through pipelines.

However, GAIL is much more than that. They plan to build even more pipelines to expand their reach and ensure even more places have access to natural gas. Apart from that, they play a big role in distributing gas directly to cities and are involved in various joint ventures with other companies.
GAIL has further future plans such as LNG trading, which is basically buying and selling natural gas that's been liquefied. With new pipeline projects coming up in 2024, this opens up exciting opportunities for GAIL to keep growing and bringing clean energy solutions to India.

 

 

2). Adani Total Gas Limited (ATGL)

Adant Total Gas Limited is related to supplying natural gas to homes, businesses, factories, and even vehicles. They further partnered with two other big companies, Adani Group and Total Energy, to build networks of pipes to deliver clean-burning natural gas directly to your house (PNG) or your car (CNG) as fuel. 

AGL is also looking at new ways to use natural gas and through their subsidiaries they have also entered in electric vehicles (e-mobility) sector and even turning plant matter (biomass) into energy. They're also producing the tools we need to use natural gas – they have a joint venture to manufacture gas meters.

The future of ATGL looks as they're starting to deal in LNG, which is natural gas that's been turned into a liquid for easier transport. By July 2024, they are set to open their first place that sells LNG as fuel, and this could be a great way to reduce pollution and carbon footprint for many businesses.

 

 

3). Gujrat Gas Limited

Gujarat Gas Limited (GGL) is a government company responsible for distributing natural gas to homes and businesses across Gujarat. They used to be called GSPC Distribution Networks Limited (GDNL). GGL offer two main ways to get natural gas:

Piped Natural Gas (PNG): It is a piped system responsible for delivering gas straight to your home or business, which is like how you might get cooking gas.
Compressed Natural Gas (CNG): CNG is compressed gas used as fuel for vehicles, like CNG cars.

GGL covers a significant area of Gujarat, including South & Central Gujarat and Saurashtra regions. They have a massive network of pipelines over 38,100 kilometers long to deliver gas wherever it's needed. 

They have also made it easy to connect to natural gas with over 817 CNG stations and millions of connections for homes, businesses, and industries.  Additionally, GGL has also expanded to other parts of India, with licenses to operate in six states and one union territory.

 

 

4). Indraprastha Gas Limited (IGL)

Indraprastha Gas Limited, which was incorporated in 1998, with an aim to bring natural gas to homes and businesses in the National Capital Territory of Delhi (NCR) area. They've further expanded their businesses to neighboring areas like Noida, Greater Noida, Ghaziabad, and many more. 

Formed as a joint venture (JV) with GAIL (India) Limited and Bharat Petroleum Corporation (BPCL) as promoters, the Government of NCT of Delhi holds a 5% equity stake in IGL. In fact, it even reached a big milestone in 2020 by opening their 550th CNG station.

 

 

5). Mahanagar Gas Limited (MGL)

Mahanagar Gas Ltd (MGL) is responsible for delivering natural gas to homes, businesses, and even cars in Mumbai and nearby areas, including Raigad District in Maharashtra. It also provides piped natural gas (PNG) for cooking and heating in homes, factories (industrial), and offices (commercial). 

MGL has a huge network of pipes over 5,900 kilometers long, made from strong steel and special plastic. Right now, they supply gas to about 1.25 million homes (domestic customers) and have the ability to connect even more (around 1.6 million). They also serve over 4,200 businesses and factories. They have a network of over 270 CNG stations with more than 1,600 pumps across Mumbai. This helps keep about 8 lakh vehicles running on clean-burning CNG!