Mahanagar Gas increases CNG price to Rs 75 per kg in first increase of 2024

Natural gas distribution company cites sourcing of additional market-priced natural gas (imported LNG) to meet growing demand for CNG as the reason for the hike of Rs 1.50 per kilogram.

By Ajit Dalvi calendar 09 Jul 2024 Views icon2524 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Mahanagar Gas increases CNG price to Rs 75 per kg in first increase of 2024

Even as demand grows for CNG-fuelled vehicles in India and the rollout of the Bajaj Freedom 125, the world’s first CNG motorcycle, the price of compressed natural gas (CNG) has been hiked. CNG provider Mahanagar Gas has, effective midnight of July 8-9, increased the price of the eco-friendly alternate fuel by Rs 1.50 per kilogram, which takes CNG price now to Rs 75 per kg.

This is the first price hike in the year to date by the natural gas distribution company. Between January and June, CNG price has been reduced once – by Rs 2.50 per kg on March 9 – which had dropped the price to Rs 73.50. CY2023 overall had seen three price reductions. It may be recollected that CNG price had hit its all-time high of Rs 89.50 per kg in November 2022, following eight price hikes in the first 10 months of CY2022. 

As regards the July 8 CNG price increase, the company said in a statement, “To meet the increasing volume of CNG and domestic piped natural gas (PNG) segments and due to further shortfall in domestic gas allocation, MGL is sourcing additional market-priced natural gas (imported LNG) which has resulted in higher gas cost.”

The operational cost of vehicles fuelled by CNG is significantly lower than those using fossil fuels like petrol and diesel. From a vehicle owner’s perspective, other than the environment-friendliness of CNG, a CNG-powered vehicle provides considerable savings compared to its petrol or diesel-engined siblings.

What’s also driving the consumer shift to CNG models is the high price of petrol (Rs 103.44 a litre in Mumbai) and diesel (Rs 89.95 a litre in Mumbai on July 9, 2024). Following Mahanagar Gas' latest price hike, tanking up on CNG is Rs 28.44 cheaper than petrol and Rs 14.95 cheaper than diesel in Mumbai.

Mahanagar Gas is not the sole company to have increased CNG prices. On June 22, Indraprastha Gas, the CNG provider in New Delhi and the National Capital Territory, had increased CNG price by one rupee per kg to Rs 75.09 per kg.

RETAIL SALES OF CNG VEHICLE RISE 33% IN JAN-JUNE 2024 

While all four vehicle sub-segments have seen growth in H1 2024, CNG cars and SUVs (up 49%) have a 44% share, while three-wheelers have 31 percent

Demand for CNG-fuelled vehicles across the passenger vehicle, three-wheeler, goods carriers and buses in India continues to be on the upswing, as seen in the retails sales in the first six months of CY2024.

Latest Vahan-derived retail sales data reveals that between January 1 and June 30, 2024, a total of 552,070 CNG-powered vehicles were sold in India, which is a strong 33% year-on-year increase (H1 2023: 414,366 units). What’s more, in a display of democratised growth, all four vehicle segments have witnessed growth with three registering strong double-digit increases.

ALSO READ: CNG vehicle sales soar 33% in first-half 2024 to 550,000 units, cars and SUVs lead the charge

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