Market Trends of CNG LPG Vehicle Industry
Commercial Vehicles Fueling the Demand for CNG and LPG Vehicle
CNG and LPG are often cheaper than traditional petrol and diesel fuels. For commercial vehicle operators, fuel cost is a significant portion of operating expenses. The lower cost of CNG and LPG can translate into substantial savings over the lifetime of the vehicle, making these options financially attractive. Compared to the more volatile oil market, CNG and LPG prices are generally more stable. This stability allows businesses to better forecast and manage their operating costs, which is crucial for commercial operations.
Increasingly stringent emission regulations worldwide are a significant driver. CNG and LPG vehicles emit fewer pollutants such as nitrogen oxides (NOx), particulate matter (PM), and carbon dioxide (CO2) compared to diesel and petrol vehicles. In urban areas, especially where air quality is a major concern, CNG and LPG vehicles are more compliant with environmental standards.
The expansion of CNG and LPG fueling stations has made these fuels more accessible. This infrastructure development is often a result of either government initiatives or partnerships between private entities and government bodies. Modern CNG and LPG vehicles have seen significant improvements in terms of performance, reliability, and fuel efficiency. This makes them more competitive with traditional fuel vehicles.
In regions where natural gas or LPG is readily available and less expensive due to domestic production, there is a natural inclination to utilize these resources. Many cities worldwide are introducing low-emission zones where vehicles that do not meet certain emission standards are either banned or subject to a fee. CNG and LPG vehicles often meet these standards, making them a viable option for businesses operating within urban areas.
However, the cost advantage offered by natural gas vehicles and supportive government policies to encourage the adoption of alternative fuel-powered vehicles is driving the global CNG and LPG vehicle market. For instance,
- In November 2022, 1 kg of CNG was priced at INR 78.61 (94 cents) compared to petrol, which cost INR 96.72 (USD 1.16) per liter, and diesel, which was priced at INR 96.67 (USD 1.16) per liter in New Delhi, India. This substantial difference in CNG and petrol/diesel pricing and the higher mileage of CNG vehicles than petrol/diesel vehicles has almost doubled the sales of CNG vehicles in India over the past few years.
Thus, the combination of all the above factors is anticipated to propel the market for CNG and LPG vehicles worldwide over the next five years.
Asia-Pacific Region is Expected to be the Largest Market During the Forecast Period
Asia-Pacific is forecasted to be the largest market for CNG and LPG vehicles in the world, led by the growth in India.
Cities in Asia-Pacific are among the most polluted globally. CNG and LPG vehicles emit fewer pollutants compared to diesel and petrol vehicles, making them attractive options for improving urban air quality. Therefore, many countries are aligned with global trends in emission standards. CNG and LPG vehicles are seen as practical steps toward meeting these stricter environmental regulations.
Moreover, regulatory policies across the region reinforce this trend. Stringent emission control policies, such as India's Bharat Stage VI emission standards, have expedited the adoption of cleaner fuel vehicles, including CNG and LPG. Furthermore, countries like China and India have specific policies promoting alternative fuel vehicles, situating CNG and LPG vehicles within broader carbon reduction strategies.
Technological advancements significantly contribute to the attractiveness of CNG and LPG vehicles. Improvements in vehicle technology have not only enhanced performance and reliability but also increased efficiency. The range and refueling times of these vehicles have seen marked improvements. Complementing these technological strides is the expansion of refueling infrastructure, which is critical for the practicality of CNG and LPG vehicles. This expansion, notably in India and China, has been instrumental in making these fuels more accessible for both personal and commercial use. The market dynamics of the Asia-Pacific region are characterized by a vast and growing vehicle population that further fuels the demand for CNG and LPG vehicles.
Following Asia-Pacific, Europe and North America are predicted to be the next biggest markets due to lower prices of natural gas and the adoption of stringent emission norms.
