Rising Demand for CNG Vehicles

CNG prices have jumped nearly 70 percent in the last year. Despite the hike in prices, CNG continues to be a popular choice for cars in the fleet segment but now also for private car owners.

Historically when it comes to CNG vehicles, Maruti Suzuki India was the first OEM to introduce factory-fitted models. It comes as no surprise that it also has the most offerings in the CNG portfolio. But nonetheless, while companies like Tata Motors and Hyundai Motor India are introducing CNG models, Toyota Kirloskar Motor became the fourth company to introduce CNG variants in India. It is also important to note that auto major like Volkswagen Group and Kia India is also closely looking at the CNG vehicle demand.

Lower cost of operation compared to cars run on diesel and petrol, new launches, and higher cash incentives are powering the rising demand for CNG vehicles, experts said.

In fact, the share of CNG vehicles comprised over 20 percent of the overall sales by the company in November. The OEM has till date sold more than a million CNG vehicles. On a YTD basis, the share of CNG vehicles comprised about 14 percent in the overall PV segment.

“The running cost of CNG at ₹2.5 to Rs 2.60 per km, is less than half of Rs 5.30 to 5.45 per km for petrol and diesel-driven vehicles,” said Shashank Srivastava, senior executive director at the country’s largest carmaker Maruti Suzuki, which has the largest portfolio of CNG cars in the country. Industry observers believe while the transition to electric vehicles is inevitable, gaseous fuels will have a bigger role to play in the medium term. If one looks at the case of Maruti Suzuki India as an example, demand for CNG models has jumped almost 3x in the last few years.

While there was the initial challenge of uniform availability of CNG across geographies, that is now being addressed by the government’s aggressive plan to expand the coverage. The number of CNG stations in the country has grown from a handful to around 4,500 in 2022 and are projected to reach 10,000 by 2026 and surpass 12,000 by 2029.