Developing India’s CNG
infrastructure could help achieve 50pc natural gas vehicles penetration by 2030
leading to crude oil import savings of Rs 11 lakh crore. In a research report
published by Nomura Research Institute (NRI), a leading global management
consulting enterprise entitled “CNG Infrastructure Development: A boon for
Indian Economy”, it has been noted that as the fastest growing economy in the
world, India has an ever increasing demand for energy which has a 35% share of
The high oil imports [USD 88
Billion in FY18] are fuelling high foreign exchange needs and have an adverse
effect on the country’s current account deficit and currency exchange rate. The
situation is further worsened by the negative trickle down effects on the
overall economy in the form of subdued GDP growth rate wholesale and consumer
inflation. The Economic Survey of 2018 also noted the negative effect of high
oil prices through the following:
“It is estimated that a $10
per barrel increase in the price of oil reduces growth by 0.2-0.3 percentage
points, increases WPI inflation by about 1.7 percentage points and worsens the
CAD by about $9-10 billion dollars” - [Economic Survey 2018]
Transport sector, is amongst
the largest consumers of imported oil [70% of diesel and almost all of petrol
is consumed by the Transport sector] as the Automotive Sector is expected to
witness an average growth rate of 8% till 2030, the current situation of energy
security would further worsen if our energy mix in transportation is not
Natural Gas vehicles are the
fastest way to reduce oil imports in the transportation sector. High customer
acceptance, availability of CNG vehicles and presence of local component
manufacturing could facilitate quick substitute to oil imports and hence an
early realisation of the benefits. However, the only major constraint to the
adoption of Natural Gas vehicles (NGV) is the NGV infrastructure; dispensing
The current plan for Natural
Gas infrastructure development unveiled by the Government of India is a step in
the right direction. It entails establishing 10,000 CNG stations in the next 10
years. Also the recently announced 10th round of CGD bidding by PNGRB will
further catalyse the momentum by establishing more CNG infrastructure to
additional 124 additional districts, taking total coverage to 52% of India’s
area and 70% of population. These steps could also help achieve 50% sales
penetration of natural gas vehicles by 2030 which in turn has the potential to
achieve crude oil import savings of Rs 11 lakh crore (USD 153 Billion at
current exchange rate) by 2030, the research report said.
In addition to the lowering
oil imports, CNG infrastructure development will yield additional benefits to
the Environment, the end-user and the economy.
Owing to the current plan on
CNG infrastructure development plan it is estimated that
* By 2030, more than 4 Lakh new
jobs would be created
* 3W & LCV drivers
switching to CNG would see a monthly increase in income by Rs 5,000 to Rs 8,000
CNG being 20-25% less CO2
emitting than conventional liquid fuels would assist India in achieving the
COP22 commitment of carbon footprint reduction. It is worth noting that major
problem of pollution in our cities is due to PM emissions (PM 2.5 and PM 10)
and in CNG the PM emissions are “almost ZERO”
While CNG is a proven and
economically viable alternative fuel for ICE cars, 3Ws, LCVs and buses, LNG
makes better commercial sense for long-haulage trucks. LNG trucks enables
storage of higher quantity of fuel in less space, leading to lower payload
penalty and longer range compared to CNG. LNG is the only validated viable
alternative to diesel in heavy commercial vehicles. This is also the reason why
many countries globally are embracing LNG trucks. Use of LNG for intercity
truck movement should be given priority and Commercial vehicle OEMs should be
encouraged to change to LNG use in a definite period of time.
While the first step in this
direction was making the announcement and developing a policy, it must be
followed-up with action on the ground. It is worth noting that while making
policies around alternatives fuels and approving more areas for setting up CNG
stations needs the Central Government’s intervention, faster development of CNG
infrastructure can only happen with active support of State Governments.
Setting up CNG stations requires multiple statutory permissions from state Governments.
While permit requirements differ state to state, permissions are required from
several different agencies e.g. approvals from District Magistrate, Departments
of Forest, Town Planning, Electricity, Fire, Police, Food Supply, Pollution
Board, Chief Medical Officer, Traffic, PESO etc. These sometimes add to delays
and unnecessary costs.
More number of CNG stations
and hence associated benefits of CNG can only be realized if CNG infrastructure
development projects are accorded great importance by the state Governments.
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