New Delhi [India]February 20 (ANI): Domestic sales of compressed natural gas (CNG) vehicles in India are expected to reach 1.1 million units by the end of this financial year, which is inspired by the government’s push and CNG infrastructure for cleaner fuel. , According to a CRISIL report.
This will translate the CNG vehicle count in India to 7.5 million, in FY 2016 from 2.6 million and a mixed annual growth rate (CAGR) of 3x from 2.6 million and 12 percent.
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The rapid growth in CNG adoption is supported by a significant expansion of stations filling across India. The number of CNG stations is estimated to be more than 7,400 in FY 2016 by just 1,081 fiscal 2025, which records ~ 24 percent CAGR.
This expansion has contributed to reducing crowds at filling stations, increasing overall customer experience and improving the operational efficiency of City Gas Distribution (CGD) network.
The availability of more than 30 CNG car models has conducted further adoption than the first single digit options. The commercial vehicle segment has also seen an increase in adoption due to tangible cost savings, currently a penetration of 10–11 percent.
The two-wheel section is looking at development with the introduction of CNG variants, while the three-wheel section, with an entry level of 28–29 percent, faces competing with electric vehicles (EVS).
Despite the strong growth, the CRISIL report highlights some challenges that may obstruct CNG infrastructure and long -term development of adoption.
CNG -FROM administered pricing mechanisms (APM) Gas allocation reduction ~ 68 percent ~ 68 percent in October 2024, and below ~ 37 percent in November 2024 below ~ 37 percent before being revised by 50 percent in January 2025 Went. Increased uncertainty for city gas distributors and increased gas sourcing costs.
Increased sourcing costs, from Rs 2-4 per kg, CNG price can be priced at Rs 4-6 per kg. However, most CGD companies have implemented a limited price increase of Rs 1-3 per kg since October 2024 to maintain competition, affecting their margin.
Additionally, CNG growth faces competition from emerging alternative fuel, including electric mobility and hybrid technologies.
To ensure long -term competition of CNG, the report suggested several policy measures, which helps to incorporate natural gas under GST to bring uniform taxation and to rationalize costs for consumers and businesses.
Reducing excise duty on CNG will help keep prices cheaper and encourage its adoption. Offering tax encouragement and subsidy for CNG vehicles can lead to further boost, especially in urban areas. (AI)
This report has been auto-generated from Ani News Service. ThePrint does not have any responsibility for its content.