Due to steep rise in petrol prices, the demand for Compressed Natural Gas (CNG) has gone up from 20 to 25% a year in the Delhi region which is likely to save Rs. 6,000 to 8,000 in a month if a driver shifts from petrol to CNG, revealed the ASSOCHAM assessment.
The reasons for increasing demand of CNG are both price and efficiency. Apart from being a cleaner fuel, CNG is more economical than petrol and diesel. Running cost of vehicles reduces by up to 75% in comparison to petrol and 30% compared with the diesel.
A paper brought by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) on “Rising petrol prices rev up demand for CNG” says that CNG works out 70% cheaper compared to petrol. This has triggered a rush of customers in installing kits to run their cars on the low cost fuel as prices of diesel and petrol are sky rocketing and going beyond the affordability of a common man.
With the rising petrol prices up by 65% since January 2009, vehicles owners in Delhi, Mumbai, and Gujarat are increasingly opting for CNG and LPG fired vehicles. On an average, one can save around Rs. 6,000 to 8,000/- in a month if a care driver shifts from petrol to CNG.
In the Delhi, around 6,000 to 8,000 vehicles are switching to CNG every month, accelerating the growth in natural gas demand to 20% to 25% a year in the region.
In Delhi, where CNG kit cost Rs. 50,000 for a petrol car and Rs. 30,000 for the older technology cars, sales are booming. The demand of CNG kit in NCR have risen 40 to 50% in the last 3-4 months.
More and more private owners are now shifting to CNG and this is the prime driver for the growth of CNG. The number of or private vehicles running on CNG in the last fiscal year soared to 4.3 lakh, three and a half times the number in 2006-07. In the past three years, IGL daily supply has increased from 21 lakh kg to 38.89 lakh kg.
ASSOCHAM further added that with increasing petrol price, the higher sales of diesel models and also witnessing increasing demands for CNG fitted cars in areas like Gujarat, Mumbai, and Delhi.
However, market for CNG models remains limited due to lack of infrastructure. Demand for CNG vehicles would have been higher if the desired infrastructure was in place nationally. The motorists are often stranded in long queues at filling stations as infrastructure has not kept pace with demand.
Even the industrial sector in and around NCR is shifting its loyalty to CNG. At present there are 520 commercial consumers of IGL from where it draws 14-15% of its business and it is bound to increase with the industries realizing the advantages of natural gas over other fuels.
ASSOCHAM also said that in the last 6-7 years, only 228 CNG filing stations have been set up in Delhi against each year’s commitment of 30 stations, majority of such stations density concentrates in South Delhi as compared to its other parts. Ideally, until today over 650 CNG filing stations could have been added to Delhi region only.
The 228 CNG dispensation centres currently cater to CNG requirements of over 4.5 lakh vehicles of which approximately 2.5 lakhs are domestic customers and remaining are commercial customers, the report says.
On the other hand the automobile sector is growing at a very high rate, leaving lot of challenges for fuel suppliers particularly those of CNG in view of its demand and environment friendly nature which could be meted out with growing number of CNG filling stations, the remedy for which has could be a multi-pronged strategy that should be evolved by policy makers in consultation with IGL.
ASSOCHAM further added that ideal locations should be immediately identified for setting up of CNG dispensation centres in South Delhi, Faridabad, Gurgaon and Noida on priority basis to popularise the use of CNG in these satellite townships to help vehicle owners to convert their engines for CNG consumption as huge demand exists for this environment friendly fuels.
It is also important that benefits of the cleaner fuels should also be made available to the towns in the National Capital Region (NCR) of Delhi. This would only facilitate the overall development of CNG network in the NCR and improve air quality in the region. Currently, the lesser availability of gas in the neighbouring towns, leads to increased pollution in Delhi as diesel vehicles continue to ply from those cities into Delhi.
The infrastructure is far short of demand. The government must provide better CNG infrastructure. There are 1,000 petrol stations but just some 200 CNG stations out of which 20% aren’t fully equipped. So, the government should focus on it.