CNG vehicles have advantage over diesel, petrol despite reducing price gap | The Financial Express

CNG vehicles have advantage over diesel, petrol despite reducing price gap

CNG prices in Delhi (where the gas is the most affordable in the country) have risen by 51% in the last year.

CNG vehicles have advantage over diesel, petrol despite reducing price gap
According to data from Indraprastha Gas, CNG cost Rs 52.04 per kg on November 14, 2021, which increased to Rs 78.61 on October 8 this year. (IE)

By Vikram Chaudhary

Despite the reducing price gap between CNG and diesel, the former has an advantage over other fuels as far as the total cost of ownership of a vehicle – be it a personal car or a commercial vehicle – is concerned, say analysts.

CNG prices in Delhi (where the gas is the most affordable in the country) have risen by 51% in the last year. According to data from Indraprastha Gas, CNG cost Rs 52.04 per kg on November 14, 2021, which increased to Rs 78.61 on October 8 this year.

Diesel prices, on the other hand, have reduced from a high of Rs 98.44 per litre on November 1, 2021, to Rs 89.62 as on October 22, 2022, according to IndianOil. Petrol prices have come down from Rs 110.08 per litre (on November 2, 2021) to Rs 96.76.

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Saket Mehra, partner, Grant Thornton Bharat, told FE that as CNG prices have increased over the past year, CNG car sales bookings declined by 10-15%, and some companies reported a slight growth in customer preference for vehicles powered by petrol fuel vis-à-vis CNG. “But due to a high level of pending bookings slowly catching up with the impending demand, the decline in sales is not immediately visible,” he said. “Overall, the sales of CNG-run passenger vehicles have remained unaffected, especially for entry-level vehicles, as they have a fuel efficiency improvement of about 30% over petrol.”

Maruti Suzuki Ertiga CNG, for example, is Rs 95,000 costlier than petrol. But CNG has better fuel efficiency (26.11 km/kg in the Ertiga) than petrol (20.51 km/litre), and therefore far lower running costs (Rs 3 per km for CNG vis-à-vis Rs 5 per km for petrol). Maruti calculated that if your run is 50 km per day, within three years you will be able to recover the extra money spent on buying the Ertiga CNG and from thereon it’s savings all the way. If your daily run is more, the recovery will happen sooner.

Therefore, in commercial vehicles (CVs), where the daily run can be as high as 400 km (data for 2020, compiled by Statista), CNG has an advantage over other fuels.

Gaurav Vangaal, associate director, Light Vehicle Forecasting, S&P Global Mobility, told FE that in CVs it’s predominantly diesel versus CNG — there is usually little price difference between a CNG and a diesel CV — and with CNG having higher fuel efficiency, operators can save lakhs of rupees per year only on fuel.

Another advantage is that in places such as Delhi, diesel-propelled vehicles have to pay 25% extra road tax over non-diesel vehicles.

Mehra added that higher fuel efficiency and easier availability of CNG have been a major attraction for CVs, since it directly translates to lower operational costs.

“The CNG goods carrier segment grew 212% in FY22,” he said. “Even with a hike in CNG prices, the increasing availability of CNG stations (4,500 in 2022 and expected to touch 10,000 by 2030) and rising products with CNG powertrain, lower total cost of ownership over diesel vehicles, and restriction to entry of diesel in certain cities (especially in Delhi from October 1, 2022, to February 28, 2023), owning and running a CNG CV appears preferable,” he added.

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What works for CNG is a longer engine life. While the cylinder and fuel lines need proactive maintenance, CNG is beneficial for the engine.

According to Mahanagar Gas, CNG has very little carbon and so it does not contaminate crankcase oil, giving a new lease of life to the engine. The absence of any lead content in CNG helps avoid lead fouling of plugs, thereby enhancing plug life. As CNG enters the engine in the form of a gas (and not as a spray or mist like petrol), no carbon is generated during the combustion of CNG, reducing the chances of wear and tear.

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First published on: 26-10-2022 at 12:50:00 am
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