Government Plans Expansion Of CNG Stations To 8,000 In Two Years

by Nivedita Mukherjee - Jul 18, 2022 12:23 PM +05:30 IST
Government Plans Expansion Of CNG Stations To 8,000 In Two YearsAn IGL CNG station. (Picture: Twitter)
Snapshot
  • The rollout of CNG at this level is expected to incentivise market for CNG vehicles at a time when higher costs of the gas are posing a challenge for companies and buyers.

In a major move towards a natural gas-based economy, India will see a brisk ramp-up of compressed natural gas (CNG) stations to 8,000 in the next two years from the existing 4,500-plus stations. As part of the scale-up, 166 CNG stations were launched last week by Minister of Petroleum and Natural Gas Hardeep Singh Puri to strengthen the gas-based infrastructure and availability of cleaner fuel in the country.

These 166 stations add on to the 1,332 which were set up in 2021-22 alone. After the completion of the ongoing city gas distribution (CGD) development in geographical areas (GAs) awarded under the 11th and 11th (A) CGD bidding round being carried out by the Petroleum and Natural Gas Regulatory Board, 98 per cent of India’s population and 88 per cent of its geographical area will have access to natural gas.

The CNG stations commissioned at a cost of Rs 400 crore and set up by Gas Authority of India, and nine of its group CGD companies over 41 GAs across 14 states are a step towards expanding availability of environment friendly fuel to the transport sector, households and industry. Importantly, the rollout of CNG at this level is expected to incentivise market for CNG vehicles at a time when higher costs of the gas are posing a challenge for companies and buyers.

Auto manufacturers also put on display CNG vehicles at the event as the government pushes for LNG based clean mobility technology vehicles in its objective to reduce vehicular emission through adoption of cleaner fuel and technology in the automotive sector.

The minister has called for enhanced coverage of CNG and LNG vehicles and availability of CNG/LNG vehicles on pan India basis by automotive companies in line with its ambitious target of expanding the share of natural gas in the primary energy mix to 15 per cent to usher in a gas-based economy which also falls within the agenda to achieve India’s target of net zero by 2070.

The Indian automobile industry led by its apex body Society of Indian Automobile Manufacturers (SIAM) is also making significant investments, resource allocation towards R&D and localisation of technology products to align with the government’s global commitment to reduce carbon emissions, achieve carbon neutrality and foster sustainable mobility.

A key focus area for manufacturers is making factory fitted CNG vehicles that would reduce air pollution and carbon emissions and support the economy by reducing the oil import burden even as customer awareness, safer option, improved availability of fuel stations rising cost of petrol and diesel and the low cost of ownership of a CNG vehicle put the CNG segment on top demand.

Maruti has seen surging demand for its CNG offerings including in Alto, S-Presso, Wagon R, Celerio, Dzire, Ertiga, Eeco, with sales crossing a million CNG vehicles. Hyundai and Tata Motors are also offering CNG cars in the Hyundai Grand i10 Nios, Aura, and Tata Tiago and Tigor respectively.

However, over the last few months, there has been an exponential increase in CNG prices which have gone up since February 2021, from Rs 49.40 per kg to Rs 80 per kg on 13 July 2022, as per industry data.

“CNG prices have seen exponential increase in the last 7 months,” agrees Rajesh Menon, director general of SIAM. The industry body feels support on CNG prices would help the common man, facilitate public transport and will enable a cleaner environment.

“The industry is keenly looking forward to the right kind of interventions and support from the government for moderating the CNG prices for the benefit of the society, economy, and country’s environment for overall achieving sustainable mobility and SDG 2030,” says Menon.

Despite the challenges, Italian auto major Piaggio's Indian subsidiary Piaggio Vehicles has just launched a CNG variant of its new passenger three-wheeler Ape NXT with fuel efficiency of up to 50 km/kg given the rising demand for alternative fuel options and the need to control pollution.

Share of diesel vehicles is coming down and is now about 18 per cent compared to a share of 58 per cent almost eight-nine years. The share of diesel vehicle sales has remained at 18 per cent for almost last 18 months, whereas the share of CNG vehicles has been increasing. While many new original equipment manufacturers (OEMs) are also launching CNG models, existing players are also planning to expand the CNG range.

Nivedita Mukherjee is a senior journalist covering economy, business, and trade.
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