CNG to lose edge to diesel after hike

MUMBAI: Planning to buy a compressed natural gas (CNG) vehicle? Or convert your existing vehicle into CNG for better fuel efficiency and to make your rupee finance that extra mile? Then think again. The environment-friendly CNG is likely to lose its price advantage to diesel by April 2014 when the new controversial gas price hike to $8.4 per mmBtu comes into force. 

So much so, it may make sense to pay a Rs 1-lakh premium for diesel cars than converting a petrol vehicle to CNG by paying Rs 60,000 for the CNG kit because the running cost for CNG and diesel vehicles will be almost the same at Rs 3 per km. 

CNG prices have already overtaken diesel prices in Ahmedabad by 15%, leading to an 80% fall in CNG vehicle sales in the city after price-sensitive Indian consumers switched to diesel- and petrol-run cars. The same may be replicated in Mumbai, Delhi and other Indian cities too as CNG is likely to lose its competitive edge in the next six months or so.