Mumbai: Indian energy firms are stepping up spending on compressed natural gas (CNG) infrastructure to meet soaring demand from vehicle makers.
India ranks fifth in the world for vehicles running on CNG, which is half the price of petrol or diesel. But CNG is offered at only about 1% of India’s 35,000 retail outlets. However, its demand along with piped gas in households is forecast to more than treble at 7% of total gas demand in the next five years, according to KPMG.
India’s third-largest car maker, Tata Motors Ltd, has introduced a CNG model and even luxury car maker DaimlerChrysler is looking to get into the segment.
“The actual problem right now is that CNG availability is restricted to cities,” said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers.
“But as the spread of CNG infrastructure increases, perhaps the shift to CNG variant vehicles will be imminent,” he said.
Leading energy firms are pouring money into gas distribution across India with state-run GAIL (India) Ltd and Reliance Industries Ltd pledging nearly $7 billion each to set up gas infrastructure.
Smaller gas transporters, such as Gujarat Gas Co. Ltd, Indraprastha Gas Ltd and Adani Energy Ltd, have also lined up multi-million dollar investment to sell natural gas across India.