A government committee, with support from the Petroleum and Natural Gas Regulatory Board (PNGRB), has proposed eliminating excise duty on Compressed Natural Gas (CNG) to reduce prices and encourage the use of eco-friendly fuel in line with India’s 2030 natural gas consumption target. The recommendations also suggest cutting GST on CNG vehicles to 5% to align them with electric vehicles for faster adoption.
The aim is to maintain a competitive price gap between CNG and petrol, motivating consumers to transition to the greener fuel option. The tax exemptions on natural gas are expected to benefit around 1.9 crore households and 38.41 lakh potential users, addressing the current high taxes that have hindered CNG competitiveness in certain regions, especially in southern states.
Additionally, the government is promoting the shift from LPG to piped natural gas (PNG) due to disruptions in supply chains from the West Asia crisis. The expansion of PNG connections has seen significant progress, with approximately 4.58 lakh new connections and 5.1 lakh registrations for new connections since March this year. States are urged to facilitate new PNG connections for residential and commercial consumers to further encourage natural gas adoption.
