The Union Cabinet’s recent decision to revise the pricing methodology of natural gas produced in India has resulted in a significant drop in compressed natural gas (CNG) prices. This move has led to increased demand for CNG vehicles, as they provide considerable savings compared to petrol or diesel-powered vehicles.
- CNG prices drop for the second time in 2023
- CNG vehicles offer considerable savings compared to petrol and diesel
- Favorable pricing of CNG leads to a surge in sales
- The latest price cut to boost demand for CNG vehicles in 2023
CNG prices drop for the second time in 2023
The recent decision by the Union Cabinet to revise the pricing methodology of natural gas produced in India has resulted in a significant drop in CNG prices. This is the second time in 2023 that CNG prices have been reduced, with the latest cut being a Rs 8/kg reduction. The first cut saw CNG being made available at Rs 87 per kg in Mumbai.
CNG vehicles offer considerable savings compared to petrol and diesel
Apart from the environmental benefits, CNG-powered vehicles provide considerable savings compared to petrol or diesel-powered vehicles. With the high price of petrol and diesel, the favorable pricing of CNG has led to a surge in demand for CNG vehicles. CNG in Mumbai now costs Rs 79/kg, making it Rs 27.29 cheaper than petrol and Rs 15.25 cheaper than diesel.
| CHANGE IN CNG PRICES | |||
|---|---|---|---|
| City | New price per kg | Old price per kg | Difference per kg |
| Delhi | Rs 73.59 | Rs 79.56 | Rs 5.95 |
| Mumbai | Rs 79 | Rs 87 | Rs 8 |
| Bengaluru | Rs 83.50 | Rs 89.50 | Rs 6 |
| Pune | Rs 87 | Rs 92 | Rs 5 |
| Meerut | Rs 83 | Rs 91 | Rs 8 |
Favorable pricing of CNG leads to surge in sales
The favorable pricing of CNG has led to a surge in demand for CNG vehicles. Retail sales of CNG vehicles have crossed the 6,50,000-unit mark for the first time in a fiscal year in 2023. Cumulative sales of 6,60,153 units translate into strong double-digit YoY growth of 46 percent. The lower cost of ownership that CNG vehicles offer in the face of high petrol and diesel prices has been the driving force behind the increase in sales.
The latest price cut to boost demand for CNG vehicles in 2023
The recent Rs 8/kg reduction in CNG prices is set to give a fillip to sales of CNG vehicles across segments in 2023. Vinod Aggarwal, SIAM president, believes that incentivizing greater production of natural gas will result in a reduction in import dependence on conventional fuels, enabling the expansion of CNG infrastructure across the country and facilitating wider availability of CNG for vehicles. The latest price cut is expected to further boost demand for CNG vehicles in the coming months.