New Delhi:

According to a recent report by the Society of Indian Automobile Manufacturers (SIAM), the share of CNG vehicles in total passenger vehicle purchases surged by over 300 per cent between FY20 and FY25. Adoption rose from 6.3 per cent in FY20 to 19.5 per cent in FY25, surpassing diesel, which remained steady between 17 and 19 per cent. Meanwhile, petrol car purchases saw a sharp decline, dropping to 57.7 per cent in FY25 from 76.3 per cent in FY20.

Additionally, FY26 is shaping up to be a historic year, as one million CNG-powered vehicles—including cars, sedans, and SUVs—expected to be sold in a single fiscal year for the first time. This marks a 20 per cent increase from FY25, when 839,000 units were sold. Meanwhile, overall passenger vehicle sales are projected to rise by only 1 to 2 per cent.

Indian car buyers are increasingly moving away from petrol and diesel, opting instead for vehicles powered by compressed natural gas (CNG), marking a major shift in India's automotive fuel preferences. With rising fuel costs, CNG dispensers are becoming more widely available across India, along with an expanding range of CNG-powered vehicles. The demand for these vehicles has grown exponentially, driven primarily by private buyers seeking fuel-efficient and environmentally friendly alternatives to petrol and diesel cars.

Surprising Momentum, Broad-Based Growth:

Contrary to earlier patterns where CNG was preferred largely by commercial fleet operators, the current growth is being driven predominantly by individual buyers. According to industry insiders, only about one-fifth of CNG vehicle sales today are attributed to the taxi segment.

Srivatsa pointed to improved availability, rising consumer confidence, and better product offerings across segments as the key growth enablers. “The appeal of CNG is not just economic, it’s also practical and increasingly aspirational,” he said.

Economics at the Wheel:

Professor Bejon Kumar Misra, International Consumer Policy Expert, echoed the sentiment, highlighting both price sensitivity and eco-consciousness among Indian consumers. “Consumers in India are increasingly leaning towards compressed natural gas (CNG) vehicles over petrol cars for several reasons. They are extremely price-sensitive and always look for savings. CNG is generally less expensive than petrol, leading to lower fuel costs.”

Misra added that CNG vehicles offer environmental benefits, emitting fewer pollutants and greenhouse gases. “Environmentally conscious consumers see CNG vehicles as a way to reduce their carbon footprint. Government incentives like tax rebates and toll exemptions have also made them more attractive,” he said.

He further noted the drastic expansion of CNG fueling infrastructure and the performance parity many CNG models have achieved with petrol variants. “The stability of CNG prices compared to volatile petrol rates is also a major advantage. Additionally, CNG burns cleaner, which results in reduced engine wear and longer vehicle life, saving on maintenance costs.”

Infrastructure and Policy Push:

The rise in CNG adoption has come even as the government continues to push electric vehicles (EVs) through subsidies and infrastructure expansion. However, for many consumers, CNG remains the more accessible option, cheaper upfront than EVs and with an already widespread fueling network.

The Indian government has been pivotal in boosting CNG’s accessibility. Union Petroleum Minister Hardeep Singh Puri recently stated that the number of CNG retail outlets has multiplied 20-fold in the last decade. From just a few hundred in 2015, India now has over 7,400 CNG stations, and the government has set an ambitious target of reaching 17,500 outlets by 2030.

Automakers Respond:

“CNG has emerged as a very good option for consumers at the entry-level, for all vehicles priced less than Rs 11 lakh,” said Tarun Garg, COO of Hyundai Motor India.

RC Bhargava, Chairman of Maruti Suzuki, stated that the company sold over 600,000 CNG vehicles in FY25 and aims to reach 700,000 units this fiscal. Notably, CNG cars accounted for one in every three Maruti cars sold in FY25, out of a total of 1.76 million units.

Among the most popular CNG models in the Indian market are the Maruti WagonR, Hyundai Exter, and Tata Punch.

Leading carmakers have responded aggressively to this consumer shift. Maruti Suzuki, Hyundai Motor India, Tata Motors, and Nissan have all expanded their CNG portfolios. In FY25 alone, the number of models offering factory-fitted CNG options doubled to 25 from just 11 in FY21.

Innovation to Address Drawbacks:

A common complaint among CNG car buyers has been reduced boot space due to the bulky gas cylinder. In response, automakers like Tata Motors and Hyundai have introduced twin-cylinder technology, replacing the single large cylinder with two slimmer ones—offering the same capacity while freeing up space for luggage.

“With the reducing life of diesel as mandated by the NGT (National Green Tribunal), which is now gaining more traction in states beyond Delhi-NCR, more and more customers are beginning to invest in other fuel options,” said Saurabh Vatsa, Managing Director of Nissan Motor India. “We must focus on what is environmentally friendlier and easier to manage without denting the pocket of the consumer.”

What Lies Ahead?

As more consumers gravitate toward cleaner, cost-effective alternatives, the long-term viability of CNG in India appears strong, especially as a transitional fuel ahead of full EV adoption. With fuel cost savings, lower emissions, greater product variety, and expanded infrastructure, CNG has successfully evolved from a budget-conscious compromise to a mainstream automotive choice.

And while CNG may not yet rival EVs in terms of policy glamour or tech headlines, its on-ground growth story is nothing short of remarkable.

Key Stats at a Glance:

CNG share of passenger vehicles in FY25: 19.5 per cent (up from 6.3 per cent in FY20)

Petrol car share: 57.7 per cent (down from 76.3 per cent in FY20)

Expected CNG vehicle sales in FY26: Over 1 million (up 20 per cent from FY25)

CNG variants offered by automakers in FY25: 25 models (up from 11 in FY21)

Target CNG fuel stations by 2030: 17,500 (currently 7,400)

Read More :

Switch 2 becomes Nintendo’s fastest selling console