CNG Sales Volume Grows 51% in 6 Months to March

New Delhi : City gas companies have grown their super-profitable CNG sales volume at a faster rate in the past two years than the less profitable segment of gas supplies meantforhomes.
City gas distributors sold 19.4 million metric standard cubic meters a day (mmscmd) of CNG in six months to March 2023, up 51% from October 2020 to March 2021 period, oil ministry data showed. In the same period, the sale of piped natural gas (PNG) meant for cooking at home rose 11% to 2.9 mmscmd.
Sales to commercial customers that includes hotels and malls, dropped 25% to 0.7 mmscmd, while those to industries fell 38% to 10.3 mmscmd as high imported gas prices forced them to switch to alternative fuels.
As a result, the share of CNG in city gas distributors’ overall sales sharply increased to 58% in two years from 39% in the six months to March 2021. The share of sales to industrial customers fell from 50% to 30%. The share of sales to households, or domestic PNG, rose marginally to 8.7% from 8%.
City gas companies get price-controlled domestic natural gas, which they can sell at market rates as CNG and domestic PNG. They are mostly monopolies in their licensed areas, giving them pricing power and fat margins. CNG and domestic PNG prices are mainly influenced by the rates of alternative fuels such as petrol and LPG cylinders. Petrol is heavily taxed and mostly moves in line with international prices, while CNG and domestic PNG are very lightly taxed.

At March-end, the number of CNG stations in the country was 5,665, up 83% in two years. Domestic PNG customers expanded by 41% to 1.1 crore in the same period. Delhi is the largest market for CNG, while Gujarat is the largest market for domestic, commercial, and industrial customers of natural gas.
City gas distributors mostly import liquefied natural gas (LNG) to supply commercial and industrial customers. Extraordinarily high prices of natural gas in international markets in the past two years forced industrial and commercial customers to switch to alternative liquid fuels such as LPG and fuel oil.
India’s LNG imports fell to 19.9 million metric tonnes (mmt) in the last fiscal year, down 22% from 25.6 mmt in 2019-20.
Expansion of CNG stations across the country, increased availability of CNG cars, and high petrol prices have combined to boost CNG sales in the country, an industry executive said.

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