India CNG Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India CNG Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India's CNG market is expected to register a CAGR of more than 3% during the forecast period. In 2021, Covid-19 affected the country, and the government placed strict lockdown, drastically impacting the CNG market. The market witnessed a decline due to lower demand for CNG from the transportation industry. Furthermore, due to international restriction supply of CNG was also affected. Factors such as supportive government policies and subsidies provided by the government are likely to propel the demand for CNG in the forecast period. The rising cost of CNG is anticipated to restrain the solar inverters market during the forecast period.

Key Highlights

• Increased electric vehicle adoption is expected to restrain the CNG market in India during the forecast period.
• Rising investment in Bio CNG is expected to create immense opportunities for the CNG market in the near future as the government plans to invest around INR 200 billion in bio CNG plants in the next few years.
• In the last couple of years, there has been a growing awareness regarding protecting the environment; thus, individuals are shifting towards CNG as a transportation fuel to reduce the emission of harmful gases. Therefore this ever-increasing awareness is expected to drive the market.

Key Market TrendsIncreased Electric Vehicle Adoption is Expected to Restrain Market

• CNG vehicles have significantly lower operating costs than diesel and petrol vehicles. However, during the last couple of years, there has been a rise in CNG prices in India. With increased awareness about the environmental effects of diesel and petrol vehicles, India's demand for alternate fuels such as CNG, LPG and EV is rising.
• In the last couple of years, there has been a significant rise in EV vehicles in India; according to the International Energy Agency, in 2012, Inda had a stock of EV cars of about 2,800 units, which increased to about 23,000 units in 2021. The number of EV vehicles is expected to grow in India due to supportive government policies and various subsidies provided to vehicle manufacturers and consumers.
• Furthermore, the government of India aims to achieve EV sales penetration in commercial cars by 70%, 30% for passenger cars, 40% for buses and 80% for two and three-wheelers. This plan is in line with the goal of the government of India to achieve net zero carbon emissions by 2070. Uttar Pradesh held the highest share in EV sales in India; there were more than 66,704 EVs sold in 2021, followed by Karnataka with 33,302 units sales and Tamil Nadu with 30,036 units.
• Moreover, according to the Ministry of Heavy Industries, more than 0.52 million EVs were registered in India in the last three years. The EV market witnessed a significant surge in demand after the oil and gas price hike due to Rusiaa- the Ukrain war.
• Various companies are investing in EV manufacturing in India; for instance, Kia Motors plans to manufacture small SUV EVs in India by 2025. with this plant, the company aims o supply SUVs globally.
• This development and increased EV adoption in India is anticipated to hinder the growth of CNG vehicles, which is expected to affect the CNG market in the forecast period negatively.

Supportive Government Policies and Initiatives are Expected to Drive the Market

• Due to various government policies, the demand for natural gas has increased in India in the last decade; for instance, the consumption of natural gas was 62.2 billion cubic metres in 2021, which is 3.1% higher than in 2020 (60.5 billion cubic metres).
• Furthermore, rising fuel prices have accelerated demand for CNG vehicles in India. Moreover, various state governments are in the process of banning diesel-based vehicles in the seat; for instance, the Delhi government has banned diesel vehicles from entry into the state in the near future.
• The Indian government aims to develop the infrastructure for CNG-based vehicles in all states, promoting the CNG market in the country during the forecast period.
• For instance, in July 2022, according to the Minister of Petroleum and Natural Gas & Housing and Urban Affairs, In India there, about 900 CNG fuel stations were present in 2014, and in 2021 the number of CNG stations has crossed 4500. It is expected to reach 8,000 by 2024, and the number is expected to touch 10,000 by 2030
• These developments are anticipated to boost the consumption of CNG in India during the forecast period.

Competitive Landscape

India CNG market is moderately fragmented. Some of the key players in the market include Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, AG&P, Gujarat Gas Ltd, and MGL.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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