Is CNG price drop coming? Govt panel pushes major fuel tax cut proposal

New Delhi: A high-level government committee, backed by the Petroleum and Natural Gas Regulatory Board (PNGRB), has recommended scrapping the 14 per cent excise duty on Compressed Natural Gas (CNG) as part of efforts to promote cleaner fuel adoption and reduce dependency on conventional fuels.

The proposal aims to make CNG fuel pricing in India more competitive and accelerate the country’s transition towards a higher share of natural gas in its energy mix.

Key proposal: Tax cuts to boost CNG adoption

The panel has recommended:

• Removal of 14% excise duty on CNG to reduce retail prices.
• Reduction of GST on CNG vehicles to 5%, at par with electric vehicles.
• Maintaining a price gap between CNG and petrol to encourage fuel switching.

Officials said the move is designed to make CNG a more attractive green fuel alternative to petrol and diesel and support India’s clean energy transition targets.

Impact on consumers and households

According to estimates, the proposed tax relief could benefit:

• Around 1.9 crore households.
• Nearly 38.41 lakh potential CNG users.

The recommendations are expected to reduce fuel costs and improve affordability for both private vehicle owners and commercial transport operators.

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Push for piped natural gas expansion

Alongside CNG reforms, the government is accelerating the shift to Piped Natural Gas (PNG) as part of its broader clean energy strategy.

Recent data shows:

• 4.58 lakh new PNG connections added since March.
• 5.1 lakh additional applications received.
• About 35,000 LPG users have switched to PNG via the MYPNGD portal.

The initiative is aimed at reducing dependence on LPG imports, particularly amid global supply disruptions linked to geopolitical tensions in West Asia.

City Gas Network expands nationwide

The City Gas Distribution (CGD) network, regulated by PNGRB, now covers:

• 307 geographical areas
• Nearly 784 districts
• 34 states and Union Territories

This expansion brings near-complete coverage across India (excluding island territories), strengthening the natural gas infrastructure in India.

Policy push for clean energy transition

The government has introduced multiple measures to promote gas-based energy, including:

• Allocation of the administered price of domestic gas.
• Simplified supply mechanisms for CGD operators.
• Mandatory PNG infrastructure in government housing projects.
• Public utility status for CGD projects.
• Inclusion of PNG systems in CPWD and NBCC housing designs.

Officials said these reforms are part of India’s long-term strategy to increase the share of natural gas in the energy mix to 15 per cent by 2030.

IANS