CGD cos stick with expansion projects amid push for EVs

CGD cos stick with expansion projects amid push for EVs

Electric vehicles (EVs) may be the flavour of the season, but city gas distribution (CGD) companies are racing ahead with their expansion plans. Mumbai-based Mahanagar Gas Ltd (MGL) is planning to spend ₹800 crore this financial year, Gujarat-based Torrent Gas over ₹3,500 crore and Delhi-based Indraprastha Gas Ltd (IGL) will spend ₹1,200 crore on expanding their capacities.

“EVs may be the talk of the town, but they are far away in most vehicle categories in India. Except for two-wheelers, I do not see EVs making a big dent in any other segment,” said Jinal Mehta, director, Torrent Gas. Two-wheelers is not a segment that the CGD companies are focused on, and compressed natural gas (CNG) will have a stronger play in the next decade in India, he added. Torrent plans to invest ₹10,000 crore over the next five years to expand its business. Last month, it had announced an investment of ₹5,000 crore in Tamil Nadu for the next five years to lay the infrastructure for its CGD business.

The Petroleum and Natural Gas Regulatory Board has authorized Torrent to set up and operate CGD networks and provide CNG and piped natural gas (PNG) in 33 districts across seven states and a Union territory. Mahanagar Gas said a large majority of demand in Mumbai for CNG comes from taxis, private cars and the 350,000 autorickshaws that ply on city roads. The company said space to set up electric charging infrastructure is inadequate in Mumbai to support large-scale EV adoption at least for the next three years.

“Yes, EVs will have some market share, going forward, but not to such a large extent that it becomes a very big risk for Mahanagar Gas,” said Sanjib Datta, managing director, MGL. While EVs will remain a part of long-term development, it will not eliminate CNG, or for that matter, eliminate petrol or diesel, Datta added.

As many as 13 states, including Andhra Pradesh, Delhi and Karnataka, have approved or notified dedicated policies to promote the adoption of EVs, according to a written reply to the Rajya Sabha on 9 August.

Maharashtra launched its EV policy in July and will offer subsidies to the first 100,000 buyers of electric two-wheelers for up to ₹5,000 per kWh of battery capacity. The state expects electric two-wheelers to account for 10% of all new vehicle registrations by 2025.

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