Electric Vehicles and Propane Pose Double Threat to CNG and PNG Markets

A new report by Dolat Capital reveals a marked increase in electric vehicle adoption, impacting CNG market share across major city gas areas. Propane's cost advantage also pressures PNG pricing, hinting at challenging times for gas companies like Mahanagar Gas, Indraprastha Gas, and Gujarat Energy.

Electric vehicles are rapidly disrupting traditional fuel markets in key urban areas, according to a recent report from Dolat Capital. The surge in EV registrations is notably affecting the market share of Compressed Natural Gas (CNG), with implications for the long-term demand for Piped Natural Gas (PNG).

The brokerage firm's analysis shows that while CNG registrations are on the rise in regions managed by Mahanagar Gas, Indraprastha Gas, and Gujarat Energy, the growth rate of EVs has surpassed them in certain areas. Particularly in Mahanagar Gas regions, EV adoption has surged by 470 basis points, whereas CNG adoption has decreased by 422 basis points between February and June 2026.

In Mumbai, EV adoption reached a record 11.3% in June 2026, while CNG recorded a drop. Delhi faces policy challenges with its new EV Policy 2.0, set to restrict new CNG auto-rickshaw registrations by the end of 2026, and ban the registration of petrol, diesel, and CNG two-wheelers post-2028. This evolving landscape, along with propane's competitive pricing over PNG, presents a dual challenge for city gas companies.