LNG as a fuel for heavy commercial vehicles looks brightest, says IOC Director Sujoy Choudhary

Liquefied Natural Gas (LNG) stands out as a promising alternative fuel option for large trucks and other heavy-duty commercial vehicles and is a sunrise segment in clean transportation, according to Sujoy Choudhary, Direct for Planning & Business Development at Indian Oil Corp.

“The major area where we are seeing significant traction is LNG. This is a sunrise area that we are seeing. LNG by road is a journey that is definitely going to be there. In the heavy vehicle segment, LNG appears as the brightest spot,” Choudhary, while speaking at the Indian Commercial Vehicle Conclave 2024 organised by CII on Thursday.

The commercial vehicle industry and the government are looking at LNG fuel as an alternative fuel option in long-haul trucks and buses, where diesel is a dominant fuel. LNG is significantly cleaner than diesel and is usually cheaper. In countries like China, LNG is being successfully used in these vehicles.

Automakers including Ashok Leyland, Tata Motors and Blue Energy have already rolled out their LNG trucks in the market. Currently, there are around 10 LNG dispensing stations in the country. Choudhary believes the availability of LNG fuel is not a big challenge as oil marketing companies are coming up with more LNG stations along the Golden Quadrilateral and other major highways.

“Already 50 LNG stations are being planned across the golden quadrilateral, of which Indian Oil is setting up 16. We have already commissioned our first station and another 5-6 stations are in the last stages of completion,” he said.

On the higher costs for LNG trucks, Choudhary noted that though LNG trucks incur higher acquisition costs when compared to diesel trucks, vehicle operation results in lower costs for fuels and the total cost of ownership is lower for LNG trucks. “We have seen that if the vehicle runs for 8,000 km a month or 1 lakh km a year you get the payback by two years,” he said.

Earlier this year, the government’s policy think tank Niti Aayog suggested some fiscal and non-fiscal incentives such as priority lanes and reduction in tax for LNG trucks to promote LNG in medium and heavy commercial vehicles. India's truck market is expected to more than quadruple to around roughly 17 million units by 2050 from 4 million trucks in 2022.

Recently, the government inaugurated the first small-scale liquefied natural gas (SSLNG) unit at GAIL (India) Ltd’s Vijaipur complex in Madhya Pradesh. Such units supply LNG in trucks and small vessels to industrial and commercial consumers in regions not connected by pipelines. Supply of LNG to areas not connected by pipelines is a major hurdle in scaling up LNG consumption.