CNG Price Increased In Mumbai Despite Soaring Demand

Mahanagar Gas (MGL), the principal CNG provider in Mumbai, has raised the price of CNG by ₹ 1.50 per kg, effective July 8th. This brings the current price of CNG to ₹ 75 per kg, marking the first increase of 2024. It's worth noting that CNG prices reached an all-time high of ₹ 89.50 per kg in November 2022. While the current price represents a rise, it remains below that record peak.

The price hike comes amidst a surge in demand for CNG vehicles. Sales figures for the first half of 2024 show a 33% year-on-year increase, with the launch of the world's first CNG motorcycle, the Bajaj Freedom 125, demand for CNG will only keep increasing. MGL attributes the price increase to a shortfall in domestic gas allocation and the need to import Liquefied Natural Gas (LNG) at a higher cost. This aligns with global trends of rising natural gas prices.

While the CNG price increase may raise eyebrows, it's important to consider the bigger picture. Across Maharashtra, petrol prices hover around ₹ 103-105 per litre, making CNG a much more attractive option at ₹ 75 per kg. This translates to a cost advantage of nearly ₹ 30 per unit. Additionally, CNG vehicles often deliver significantly higher mileage per kg compared to their petrol counterparts. Read more. In essence, even with the recent hike, running a CNG vehicle remains substantially cheaper than petrol in the current scenario.

Demand for CNG vehicles in India is cruising at high speeds. Sales figures for the first half of 2024 show a robust 33% increase year-on-year. This growth is fueled by several factors. Firstly, the operational cost of CNG vehicles is significantly lower compared to traditional petrol and diesel options. Secondly, CNG has environmental benefits, appealing to eco-conscious consumers. 

Lastly, the recent launch of the Bajaj Freedom 125 has opened up a new dimension to the CNG sales which were previously limited to passenger cars, SUVs, three-wheelers, and buses. We could also see innovation in CNG storage which remains to be the only hurdle in a more efficient and easy usage of CNG.