India CNG Market Size and Growth 2025 to 2034
The India CNG market size was valued at USD 22.91 billion in 2024 and is expected to reach around USD 52.36 billion by 2034, growing at a compound annual growth rate (CAGR) of 8.61% over the forecast 2025 to 2034.
The market for CNG (Compressed Natural Gas) is growing very fast due to the vast demand for cleaner, cost-effective, and environmentally friendly alternatives to conventional fuels. CNG offers lower emissions compared to gasoline and diesel, making it an attractive option for industries focused on reducing their carbon footprint. Additionally, the rise in government incentives and regulations promoting sustainable energy solutions, coupled with the growing adoption of CNG vehicles and infrastructure development, further supports its rapid market growth.
CEO Statements
Adani Total Gas Ltd (ATGL) – Suresh P Manglani, CEO
- " ATGL is aggressively expanding its CNG station network across India, aiming to establish over 1,800 CNG stations in the next 7 to 10 years. The company is also diversifying into compressed biogas (CBG) and electric vehicle (EV) charging services to offer a comprehensive clean energy portfolio."
VE Commercial Vehicles- Vinod Aggarwal, CEO
- "With the government's revised domestic gas pricing, we foresee a reduction in CNG costs, which will boost consumer interest in CNG-powered vehicles. The expansion of the CNG infrastructure is critical to reducing India's dependency on imported fuels."
India CNG Market Growth Factors
- Government incentives: The Indian government's emphasis on cleaner energy alternatives drives the growth of CNG. Other policies such as subsidies, tax rebates, and incentives for CNG adoption are attractive for users. IOC, for instance, is working vigorously to expand its CNG network based on these incentives with the idea of providing easy availability of cheap and cleaner fuel across India.
- Environmental factors: Increased environmental awareness concerning pollution and health has also fuelled a move towards CNG as it is considered cleaner. Here, cities like Delhi have stood by the same and is working towards popularising CNG in the transport fleet of public vehicles. DTC has brought CNG buses into the system to reduce emission and develop a healthy environment. All these factors contribute to why it reiterates as an emerging factor behind growth.
- Growth in refueling and CNG station infrastructure: The expansion of CNG stations and refueling infrastructure is vital for CNG's widespread adoption. Companies such as IGL constantly expand their CNG refueling network to more cities to improve access and drive market growth.
- Increasing fuel prices: Rising petrol and diesel prices present CNG as a cost-effective alternative. As fuel prices wax while others wane, consumers and businesses are hunting for alternatives, thus causing a quick pace of CNG adoption. Utilities such as Adani Gas focusing on expanding availability of CNG to make the most of such opportunities stand out with regards to competitive pricing against conventional fuels.
India CNG Market Trends
- Growing CNG Vehicle Adoption: The increase in CNG vehicle adoption is due to emerging support of the CNG vehicle by government authorities and realization of increasing global temperatures. One of India's leading automobile companies, Maruti Suzuki has presented several models with CNG variants to cash in on this opportunity.
- Increase in CNG Facilities: As demand for a continuing supply of CNG grows, CNG refueling stations are continually expanding. For instance, GAIL (India) Limited had, in fact, heavily stepped up efforts to bring the number of CNG stations to large capacities so as to cover the operations of a growing fleet of vehicles.
- Hybrid Vehicles: Integration of hybrid vehicles which work on both electric and CNG sources of power are becoming common in India. Tata Motors has shown the way to introduce hybrid CNG-powered buses that offer environmental benefits as well as cost savings, unfolding the potential for this kind of trend to emerge in the future of transportation.
India CNG Market Dynamics
Drivers
- Pollution Control: Reducing emissions from vehicles and industrial sources is a significant driver for CNG adoption. The government’s commitment to reducing air pollution in cities like Delhi has pushed more companies to adopt CNG. Delhi-based auto fleets like those of Uber and Ola are making strides toward transitioning to CNG-powered vehicles.
- Increased demand for CNG: CNG demand rises as consumers require cheaper and greener alternatives to conventional fuels; companies such as Honda and Hyundai are responding to this increase in demand by putting forth more CNG vehicles in response to consumer preference for environmentally friendly fuel alternatives.
- Commercial asset transformation continues: A large number of commercial vehicle operators convert their fleets to CNG, with the intention of lowering their operating costs. For example, Blue Dart Express, like many other logistics companies, is gradual in switching their trucks to CNG, with aims at optimizing costs.
Restraints
- Infrastructure Limitation: The most prominent barrier to the adoption of CNG remains that of establishing CNG stations, especially for rural and remote locations. In order to mitigate the issues themselves, firms such as Indraprastha Gas Limited have extended their network towards these lesser-served regions.
- Initial Conversion Costs: Retrofitting existing vehicles with CNG kits is an expensive proposition that remains intimidating. Nevertheless, some like Tata Motors have come with factory-made CNG variants of their vehicles, which do away with those conversion costs and, hence, make it quite easy to make the switch for consumers.
- Competition with Electric Vehicles: Electric vehicles are growing fast. This may limit the usage of CNG somewhat. This will challenge the role of CNG in India as companies like Tata Motors and Mahindra are out there developing electric vehicle models.
Opportunities
- Infrastructure Development: The further expansion of CNG refueling infrastructure holds enormous growth opportunities. Indian Oil Corporation (IOC) has been very aggressive in establishing CNG refueling stations across the country by taking advantage of the growing demand for cleaner fuel options.
- CNG Storage Innovations: With a surge in the demand for CNG, new cost-effective storage innovation is seen as an opportunity. Linde India and other companies are investing innovations that will enhance CNG storage technology for both the consumer and the supplier.
- Hybrid CNG Cars: As the world shifts toward electric and hybrid vehicle acceptance, the horizon of launching CNG-powered variants in hybrid vehicles has opened up. Maruti Suzuki has seen this window of opportunity and has introduced hybrid CNG models in the market to the consumer's advantage by offering low emission and saving on fuel costs.
Challenges
- Regulatory Compliance: Emission standards and the regulations of fuel efficiency could act as a challenge to manufacturers of CNG vehicles. For example, Maruti Suzuki had to invest in advanced CNG engine technology to comply with stringent government standards on emission and ensure that fuel efficiency is met.
- Fuel Supply Issues: There would be a consistent supply of CNG for it to reach the market and then get its demand fulfilled as is usually the case, mainly because of rural unavailability, which GAIL (India) Limited would have plans to extend through pipelines throughout the country.
- High Conversion Costs: The conversion of vehicles to run on CNG is very expensive, which deters some vehicle owners. Companies like Tata Motors are mitigating this challenge by offering factory-fitted CNG options, which lower conversion costs for customers and make it easier for them to switch.
India CNG Market Segmental Analysis
The India CNG market is segmented into source, end user, and application. Based on source, the market is classified into associated gas, non-associated gas, unconventional sources. Based on end user, the market is classified into light duty vehicles, medium/heavy duty buses, medium/heavy duty trucks, and others. Based on application, the market is classified into residential, chemical, industrial, auto gas, refinery, and others.
Source Analysis
Associated Gas: Associated gas is a natural gas found in association with crude oil. It is liberated when oil is produced; if not collected, it is often flared. In the Indian context, associated gas has great importance as a resource for producing CNG especially in areas where oil exploration is carried out. Increasingly, the companies, Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC), have been tapping associated gas to cater to the growing demand for CNG. Hence, associated gas is available in a practical sense and is important for expanding the CNG infrastructure of the country.
Non-associated gas: Non-associated gas is extracted independently of crude oil production from its dedicated gas fields. In India, non-associated gas constitutes a huge part of the CNG supplies, with its sources being largely domestic fields such as the Krishna-Godavari basin and imported liquefied natural gas (LNG). Companies like GAIL (India) Limited and Reliance Industries are heavily working towards the exploration and delivery of non-associated gas, catering CNG to meet the ever-growing demand for cleaner alternative energy solutions for transport.
Unconventional sources: Unconventional sources of natural gas, such as shale gas and CBM, are attracting attention as a possible source of CNG in India. While these resources have not been fully tapped in India, their development is growing. Companies like Cairn Oil & Gas (a subsidiary of Vedanta) are exploring the development of the unconventional sources of energy in order to diversify the supply of natural gas in the country to ease supply constraints and reduce dependence on ever-increasing imports of LNG. Development of these sources can strengthen India's energy security as well as CNG market growth.
End User Analysis
Light Duty Vehicles: Light-duty vehicles are the major consumers of CNG in India. Passenger cars or smaller commercial vehicles have an advantage as their price is reduced because of CNG, and also their emissions are lower. A number of best-selling car models are now being offered as factory-fitted CNG systems. Companies such as Maruti Suzuki and Hyundai have CNG versions of their best-selling products in the market to assist the general public in saving on fuel expenses and switching to cleaner fuel options. The penetration and rising acceptance of CNG-powered LDVs is one of the most influencing factors in putting CNG on the market for consideration.
Medium/Heavy-duty buses: Medium/Heavy-duty buses using CNG have now become a common sight in Indian cities, especially as far as public transport is concerned. Government fleets in Delhi and Mumbai are operating these buses to combat air pollution and cut down on fuel costs. Tata Motors and Ashok Leyland, among others supply CNG-powered buses to various state transport corporations that are hugely investing in cleaner vehicles targeting the aspirations of the increasingly growing urban populations for green public transport options.
Medium/Heavy-duty trucks: Medium/Heavy-duty trucks are the lifeblood of India's logistics and freight movement. The increasing cost of fuels and the rising demand for cleaner alternatives have seen many fleet owners moving to CNG trucks. Many manufacturers, including Eicher Motors and Tata Motors, among others, have brought out various models of CNG trucks to meet this demand with choices that are both economical in their operational costs and comparatively eco-friendly when juxtaposed with diesel-powered trucks. With increasing concerns about sustainability, CNG trucks will play a larger role in contributing to climate management in the logistics sector in times to come by reducing emissions and operational costs.
Other applications: CNG can also be used as industrial fuels, and other purposes in generating power. Some industrial states use the cleaner fuel CNG for boilers and furnaces which in the long run, usually consume coal or oil for energy purposes. Fuel consumption by the power plant is now under investigation particularly in countries which have installed a natural gas network. Companies like GAIL and Indian Oil Corporation are busy exploring more avenues for CNG in the non-automotive sectors, as this clean fuel can be used for so many things.
India CNG Market Top Companies
- Bharat Petroleum Corporation Limited
- Hindustan Petroleum Corporation Limited
- AG&P
- Gujarat Gas Ltd
- MGL
- Adani Group
- THINK Gas Distribution Pvt. Ltd
- Central U.P. Gas Limited
- GAIL (India) Limited
- Sabarmati Gas Limited
Recent Developments
Recent strategic collaborations in the India CNG market reflect a strong commitment to expanding infrastructure, improving fuel accessibility, and promoting sustainable energy solutions. These partnerships often focus on setting up new refueling stations, increasing CNG production capacity, and enhancing distribution networks, thereby supporting the growing demand for cleaner energy alternatives. Companies aim to strengthen their foothold in both urban and rural areas to meet the evolving needs of consumers and businesses. By aligning with government initiatives and leveraging technological advancements, these collaborations also contribute to reducing the carbon footprint and enhancing environmental sustainability in the transportation sector. Some notable examples of key developments in the CNG industry include:
- In July 2022, CNG prices in Mumbai were raised by Rs 4 per kg, marking the 10th price hike within 18 months. This followed a cumulative 62% increase since February 2021, when CNG prices stood at Rs 49.40 per kg, reaching Rs 80 per kg by July 2022.
- In July 2022, the Ministry of Petroleum and Natural Gas & Housing and Urban Affairs, in collaboration with GAIL (India) Limited, commissioned 166 new CNG stations. These stations were set up by GAIL and nine City Gas Distribution companies across 41 areas in 14 states, expanding the country's CNG infrastructure.
Market Segmentation
By Source
- Associated Gas
- Non-Associated Gas
- Unconventional Sources
By End User
- Light Duty Vehicles
- Medium/Heavy Duty Buses
- Medium/Heavy Duty Trucks
- Others
By Application
- Residential / Commercial
- Chemical
- Industrial
- Auto Gas
- Refinery
- Others
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