Compressed Natural Gas (CNG) is commonly thought of as an economical alternative to conventional automobile fuels like Petrol and Diesel. Now, the eco-friendly fuel substitute has also started following the escalating price trend of other fossil fuels. Currently, its retail rate is touching Rs 110 per kg in Nagpur. In fact, the price of CNG used to be Rs 120 per kg in Nagpur until 2 days ago. However, a price cut was done after the only CNG supplier in the city received flak for the exorbitant pricing.
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The price of CNG in Nagpur is the highest in the state, perhaps the highest in the country. The main causes include the higher price of diesel and swings in the international market. Additionally, in September last year, the central government increase the price of natural gas by 62 per cent. Also, the government has stopped subsidies for LNG. Since LNG is imported in Nagpur from Gujarat, the surge in diesel prices has significantly increased its transportation cost, almost doubling the cost per trip. After transportation, this LNG is converted into CNG by an authorised Compressed Natural Gas refuelling station.
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Currently, Nagpur has only three CNG stations (all run by the Rawmatt group) – Automotive Square, Wadi and Khapri. All three stations offer similar prices. The price of CNG has been slowly increasing since September last year, leading up to an almost 50 per cent rise in CNG prices less than a year. The global prices of LNG are also at the highest ever currently. This has also led to a cut in the import of LNG which contributes to half of India’s gas consumption.
The international market rates have also not shown a decrease for a while now. The primary reasons for this include LNG plant outages, higher carbon prices, and lower than average gas storage in Europe. There has also been an increase in demand post-Covid. Since the beginning of the pandemic last year, the Asia-delivered spot Liquefied Natural Gas (LNG) prices have gone from under $2 mmBtu to $30 per mmBtu. Additionally, big consumers like China and Japan have also been pushing to replenish storage ahead of winter.
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This sudden increase will impact the adoption of Compressed Natural Gas as a fuel in cities like Nagpur. Compared to 23,663 petrol-fuelled autorickshaws, the city has only 10 CNG-fuelled autorickshaws plying within city limits. Now, with the CNG price touching Rs 100 per kg, the monthly budget of autorickshaw drivers and private vehicle users is bound to take a hit. Mileage is the primary reason for people to switch from petrol to CNG. It is said to offer around 40 km per kg, compared to 22 km per litre petrol.
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Currently, one litre of petrol costs around Rs 110 in Mumbai. On the other hand, the cost of LPG for vehicles is Rs 37.3 per litre. In Mumbai, CNG is currently available at almost half the price (roughly Rs 66 per kg in Mumbai). This has led to a pretty fast adoption of CNG vehicles in the financial capital of the country.
