It is no secret that the world is facing a fuel crunch. India has been facing the fuel price hike crisis for a long time now and that has left a bad effect on the Auto industry. After the increase in Petrol price, the CNG price is also going up. The recently hiked price of CNG has led to a decrease in sales of CNG vehicles in India. The automotive industry has also requested the Ministry of Petroleum and Natural Gas to address the gas companies regarding the issue and reduce the prices.
Also read: Maruti Suzuki Swift CNG Launched At ₹7.77 Lakh
The CNG rates are increasing rapidly, as compared to the last year, CNG has become twice more expensive with an increase of 50-60%. The side effect of which can be seen clearly in the sale of CNG vehicles, which has fallen by 10-15% in the last 12 months. The CNG sales in march 2022 were at 29,535 units which have shown a dramatic fall in July with 25,480 units. The increased gas allocation in the city distribution by the center has increased to 94% due to which the gas volume of CGD companies has gone up from 17.5 to 20 mmscmd.
The prices have also increased by the City Gas companies. In the metro cities, the hike has been up to ₹75-96 per kg In August 2022 which is dramatically more than last year’s price of ₹50 per kg. Many CNG companies have increased the rates including the highest increase of ₹10 per kg by Mahanagar Gas. Where IGL and Gujarat Gas did not show any fluctuations the MGL cut the price by ₹6 per kg after the boost in domestic gas allocation. The additional cost of ₹80,000-90,000 for the CNG variant compared to the conventionally powered cars with discounts has also affected the CNG vehicle sales.
As per the Vahan data, the CNG passenger vehicles accounted for 12% of total sales in July 2022. Where the states of Maharashtra, Gujarat, Uttar Pradesh, Haryana, and Delhi are at the top with 85% of sales. Taking the look at the automakers Maruti Suzuki accounts for 70% of the CNG car market. And out of its total sale, CNG cars have 20% accounting. Over time CNG has proven itself to be a more cost-effective and cleaner option for both environment and customers. But the increased price of CNG, combined with other factors like part shortage and late introduction of CNG variants in cars can stop many car makers from reaching their goals.