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CNG penetration
What it is
The share of passenger vehicles running on compressed natural gas, sold mainly as factory-fitted variants rather than aftermarket conversions. CNG overtook diesel in FY25 and widened the gap in FY26
The pull is running cost - roughly a third cheaper per km than petrol - supported by a city gas distribution network now spanning 600+ cities, with the segment crossing 10 lakh units in FY26
Impact on industries
- A structural share gain, not a fuel-price blip - CNG rose from ~6% of PV sales in FY20 to ~22% in FY26 while petrol fell from ~76% to under half
- Bridges the gap for high-mileage buyers who cannot yet justify an EV, and is the fuel of choice for fleet and taxi demand where economics decide
- Extremely concentrated - one manufacturer holds ~70% of CNG car volume through factory-fitted variants, so it is a company strategy as much as a market trend
- Long-term position is squeezed from both sides: EV penetration is rising faster from a lower base, while CNG's own advantage depends on the petrol-gas price gap holding