The rapid growth in CNG adoption will be supported by a significant expansion of filling stations across India as well as the government’s push for cl
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Sales of compressed natural gas (CNG) vehicles in India will see a significant rise in the coming months. The domestic sales of CNG vehicles in the country are expected to reach 1 lakh units by the end of the current financial year (FY2024-25), driven by the Indian government’s push for cleaner fuels and expansion of CNG filling infrastructure across the country, claims a report by Crisil. This will take the CNG vehicle count in India to 75 lakh by the end of this fiscal, marking a three-times surge from 26 lakh recorded in FY2016. Also, this will mark a 12 per cent compound annual growth rate (CAGR) for the CNG vehicle fleet in India.
The study has pointed out that this projected growth in CNG vehicle adoption will be majorly attributed to the improving CNG filling infrastructure across India. The number of CNG filling stations is projected to exceed 7,400 by the end of this financial year, up from just 1,081 in FY2016. The growth of CNG filling stations across India has registered a CAGR of around 24 per cent. between FY2016 and FY2025.
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The report claims that the expansion of CNG filling stations across India has contributed to reducing congestion at filling stations, enhancing the overall customer experience. Besides that increased availability of more than 30 CNG passenger vehicle models, compared to single-digit options earlier, has further driven the adoption rate. The commercial vehicle segment has also seen an increase in CNG adoption due to tangible cost savings, with the penetration level currently being at 10-11 per cent. The two-wheeler segment is currently witnessing growth with the introduction of CNG variants, while the three-wheeler segment, with a penetration level of 28-29 per cent, faces competition from electric vehicles (EVs).
However, despite strong growth, the Crisil report highlights certain challenges that could hinder the long-term development of CNG infrastructure and adoption. It has also pointed out that the increased sourcing costs, ranging from ₹2-4 per kg, could have resulted in CNG price hikes of ₹4-6 per kg. Additionally, the growth of CNG faces competition from emerging alternative fuels, including electric mobility and hybrid technologies.
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First Published Date: 23 Feb 2025, 07:09 AM IST
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