The uptake of compressed natural gas (CNG) was notably sluggish in December, reigniting worries about how the transition to electric vehicles (EVs) might affect city gas distribution (CGD) companies.
According to a report by Antique Stock Broking, December 2023 saw a decrease in CNG adoption across all three major CGD companies. This downturn primarily involves vehicle conversions from traditional fuels like petrol or diesel to CNG.
Mahanagar Gas was impacted because quarter two was a record-high quarter for the company in terms of volumes and conversions. Gujarat Gas and Indraprastha Gas Ltd (IGL) continue to suffer in terms of volume growth and that is something that has been a cause of concern in quarter two for these companies as well.
The hit was seen across segments such as passenger vehicles (PV), commercial vehicles (CV), or three-wheelers. Private vehicles, which were seeing strong adoption of CNG, have also now cooled off as people are now exploring options in EVs versus CNG vehicles.
While the CGD companies are hoping the trend will reverse, there is a strong push coming in from OEMs. Even the CNG bus has been lagging and IGL and Gujarat Gas continue to lose their market share to EVs.
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