CNG (CNG)

Compressed Natural Gas (CNG) is fossil-origin natural gas — primarily methane sourced from underground gas fields — compressed to 200–250 bar in high-pressure cylinders for use as a vehicle fuel, industrial gas, or piped supplement. The compression reduces natural gas to less than 1% of its volume at atmospheric pressure, enabling storage densities (roughly 230 kg/m3 at 250 bar) high enough for practical mobility. CNG was first commercialised as a vehicle fuel in Italy in the 1930s; in India, it was rolled out from the late 1990s in response to Supreme Court orders mandating clean transport in Delhi, expanding to over 5,000 retail stations across the country by 2026.

CNG composition follows IS 15958:2012 (the Indian Standard for CNG as automotive fuel): minimum 93% methane, with the balance comprising ethane, propane, traces of higher hydrocarbons, CO2, and nitrogen. Calorific value is 47–49 MJ per kg, energy density of 9 MJ per litre at 250 bar (about a quarter of diesel volumetric energy), and combustion produces 25% less CO2 per unit energy than petrol and 20% less than diesel. CNG also produces near-zero particulate matter and 80–90% lower NOx than diesel, making it the dominant clean fuel for urban buses, autorickshaws, and taxis in NCR, Mumbai, Pune, Ahmedabad, and several other Indian metros.

For the CBG sector, CNG is both the technical benchmark and the market substitute. Technical benchmark because upgraded biomethane must match CNG specifications under IS 16087:2016 to use existing CNG infrastructure — compressors, cascade storage, dispensers, and vehicle fuel tanks are identical. Market substitute because CBG enters retail through the same City Gas Distribution (CGD) network operated by IGL, MGL, GGL, and others, blended with CNG at PPSL connection points or sold under SATAT framework at notified prices. Indian CNG retail prices (Rs 75–95 per kg as of 2026, varying by city and tax regime) anchor the CBG opportunity cost — CBG producers receive a SATAT ex-plant rate (Rs 54 per kg) which is sustainable only because the OMC retail margin and city-gate transport costs are absorbed downstream. Natural gas geopolitics (LNG import dependence, Russia-Ukraine pricing shocks, Henry Hub linkages) directly affect CNG retail and therefore the policy support that CBG receives as a substitute fuel.