Automakers decrease production of CNG vehicles as natural gas prices rise

Indian automakers have been forced to cut the production of CNG-powered vehicles due to rising costs of natural gas. The automakers expect the rates to go up further in the upcoming round of revision, a report in Economic Times (ET) said.

The industry has reduced its production target to 500,000-550,000 vehicles for FY23. At the beginning of the current financial year, this target was 700,000-750,000. In FY22, a total of 261,000 CNG vehicles were sold in India.

The CNG prices are revised twice a year, once in April and again in October. Earlier in the year, when the petrol and diesel prices were rising, the demand for CNG prices was increasing. However, now that the prices have stabilised, the demand for such vehicles has also fallen.