Soaring fuel prices increase demand for CNG vehicles across NCR

Car showrooms and second-hand car dealers have been getting as many queries for CNG vehicles now as they had been during odd-even rule.

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New Delhi: With each litre of petrol now costing Rs 78.43 in Delhi and with no strong sign of the record prices coming down, many in the National Capital Region are looking at CNG vehicles to offset the load on their wallets.

According to a second-hand car dealership in south Delhi's Greater Kailash, the demand for CNG vehicles has spiked in recent weeks with more and more people inquiring about these cars. "We get about 20 queries every day for CNG cars alone. This is almost as many as we used to receive during odd-even traffic rules which had allowed CNG cars to play every day," says Nitin Jhanjhar of VT Automobiles. "We have a few CNG cars in our inventory but we expected to sell them off in a week's time."

With petrol and diesel prices climbing to record highs, CNG's cost-effectiveness is once again in focus. Despite two hikes in CNG prices by Indraprastha Gas Limited (IGL) in the last two months, the fuel option remains almost 60% cheaper than petrol and 40% cheaper than diesel. "Purchasing power of people have increased so many preferred paying extra for petrol or diesel rather than standing in queue for CNG refills. But things are different now. There has been a renewed demand for company-fitted CNG cars and people don't mind losing boot space and paying extra for these vehicles because there are long-term benefits," said a car showroom owner in Gurgaon.

CNG has been billed as not just a cheaper alternative to petrol and diesel but is proven to be a far cleaner fuel option. The one major drawback of CNG fuel option though is that there are not enough pumps to cater to the large fleet of private cars, radio cabs and three-wheelers. While IGL plans to expand the number of pumps across NCR in the months to come, many complain that the waiting time currently is far too long. "Getting CNG filled at any pump in Delhi during the day is next to impossible for someone like me. It takes at least 30 to 45 minutes," says Atul Johar, an architect based in Saket. "If I run out of CNG, I drive on petrol but I usually ensure CNG is filled in my car at midnight or early in the morning when the rush is less."

Pump attendants like Ram Saran too say that the rush has only increased in recent weeks with even off-peak hours seeing more and more vehicles. "We usually consider midnight to 6am as the lean time with mostly taxis and autos coming in. Now, more and more private vehicles are coming in as well in those hours," says the employee at IGL's Nehru Place pump.

While there has been a demand for petrol and diesel prices to be included in GST which could mean a significant drop in prices, economic analysts believe the government will not let go off the money being earned on these fuels. Ministers like Nitin Gadkari have already said that cutting back on excise taxes would mean welfare schemes taking a hit. Meanwhile, Oil Minister Dharmendra Pradhan has said that the ball is in the court of the GST Council.

If petrol and diesel prices do get included in GST, the demand for CNG vehicles could see a significant dip - a fact that second-hand car dealers like Jhanjhar is well aware of. "(But) It is highly unlikely that petrol and diesel prices are included in GST. If, by chance, it happens, CNG prices too could fall by a bit because input transport cost would go down. In any case, most second-hand car dealers tend to not stockpile CNG beyond a certain number which means demand remains slightly higher than supply," he says.

As on Tuesday (May 29), petrol in Delhi is at Rs 78.43 per litre, diesel at Rs 69.31 per litre and CNG at Rs 41.97 per kilo. For approximate reference, a small car fitted with CNG cylinder of 8-kilo capacity runs for about 140 kilometers which means 17.5 kms in city traffic per kilo of CNG filled at Rs 41.97. A petrol-only car of similar proportions would roughly guzzle a litre of petrol every 17 to 20 kms in city traffic, and at Rs 78.43 per litre, would clearly work out to be far costlier in the short and long term.