Why Is CNG So Expensive?

Why Is CNG So Expensive? Nowadays very few people like to buy diesel cars, they either want to buy CNG, electric or petrol cars. People may move towards electric cars instead of CNG-engine cars, but very few electric refill stations have been built in India till now. And there is no doubt that electric cars are more efficient than CNG cars. But just being efficient doesn’t mean anything, when you can’t go where you want to go then why would you buy an electric car? So now we are left with CNG cars and petrol cars. But in this blog, we are going to talk about fuel instead of cars. Today we are going to talk about the rising price of CNG fuel.

Why Is CNG So Expensive In India?

In the last few years, the price of CNG has increased rapidly. Earlier, people mostly chose CNG over petrol but now it is not so. And this is because there is only a difference of 20 to 30 rupees between petrol and CNG. Let’s know why the price of CNG has increased and who has increased.

• One reason is that whenever the prices of petrol and diesel increase, city distributors like Indraprastha Gas Ltd, Mahanagar Gas, etc., also increase the price of CNG.

• The international increase in natural gas prices affects CNG costs, as Compressed Natural Gas is obtained from natural gas.

• Disturbances in the supply chain relating to politics, international relations, disputes, natural disasters, transport, delivery delays, labor shortages, etc., can lead to higher prices for CNG.

• As you all know, nowadays there are changes in government policies and tax systems almost every day, and this is a big reason for the sudden increase in the price of CNG. For instance, an increase in excise duty or deduction in subsidies affects the CNG price.

Inflation

You all must be aware that earlier the value of 1 dollar used to be 60 rupees but today the value of 1 dollar has gone up to 80 rupees. Due to the fall in the value of the rupee, importing natural gas is becoming expensive, due to which CNG is becoming expensive.

Also read: Why Is My CNG Car Low Mileage?

Private CNG Distributors

Those who are distributors of CNG also have to create infrastructure for CNG in India which costs a lot of money. So due to this also CNG distributors increase the price of CNG. CNG distributors such as Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, AG&P, Gujarat Gas Ltd, MGL, Adani Group, THINK Gas Distribution, etc.

• General inflationary trends can increase the cost of production and distribution of CNG, leading to price hikes.

Import Of Natural Gas

High dependency on imported natural gas can expose prices to international market fluctuations, which can lead to increases in CNG prices domestically.

Modifications in the market need and supply balance for natural gas can impact CNG prices. The demand for CNG is very high but the supply is low, therefore, it also affects the price. You must have seen how many vehicles stand in queues at fuel stations to fill CNG. This shows how high the demand is and how low the supply is. We hope you have understood why CNG is so expensive.