Don't bet on CNG, Auto Inc tells govt

NEW DELHI, JULY 14:The domestic automobile industry has written to the government to look beyond CNG as an alternative to fossil fuels like petrol and diesel and lay more stress on hydrogen fuel.
In its automotive mission plan, Society for Indian Automobile Manufacturers (Siam) has recommended that the government should take steps to ensure availability of hydrogen, underlining its importance as the fuel for the future while terming CNG as a short-term measure.
Auto majors like M&M, Tata and Ashok Leyland have already come up with hybrid vehicles, which can be run on hydrogen fuel. Industry is also prepared to use a blend of bio-diesel with diesel, but the lack of availability of the former is restricting progress.
‘‘As an alternative to petrol/diesel, CNG is the only feasible fuel right now. But it is heavily subsidised and the penetration level is also low which cast aspersions to its long-term usage. Without the subsidies, the fuel may lose out its competitive edge as compared to diesel,’’ said Siam Secretary General Dilip Chenoy.
Prices of CNG are under government control. In fact, the administered price paid by Indraprastha Gas Ltd is around 40% of the free-market price of Rs 9,000 per million standard cubic metre.
Siam believes that though availability of CNG is not an issue now, if it is introduced for the whole country, then there could be a demand-supply imbalance. Of course, the government may have a problem in sustaining the subsidies at a higher volume. ‘‘CNG cannot be a long-term solution, because in a free-market scenario, its price will shoot up,’’ Chenoy added.
Another factor which works against CNG is its higher nitrogen oxide emission levels. Methane, a primary constituent of CNG, contributes to global warming even more than carbon dioxide.
Industry sees bio-diesel and hydrogen as long-term solutions but is baffled by the government’s inaction. So far the jatropha plantation policy has not been finalised even as the government has put ethanol petrol mix norms on the fast track. ‘‘The government’s thrust on blends—ethanol petrol, hydrogen-CNG or bio diesel-diesel—will only delay the exhaustion of fossil fuel,’’ said an IOC official.
However, there is a section that believes CNG is the way to go. ‘‘Availability and price prove that CNG is viable under the current circumstances. There is no straight answer whether subsidies will be there or not but it is viable for cars, buses and three-wheelers with limited operation across the country,’’ said Ashok Leyland Managing Director R Seshasayee.
In fact, the spate of CNG variants set to make an entry in the market suggests industry is reconciled. ‘‘Hydrogen fuel will take some time to develop and the conditions are not conducive for its use. CNG provides the best alternative,’’ said Hyundai Vice President Marketing and Sales Arvind Saxena.
With public transport in Delhi totally powered by CNG, history has been created. But doubts remain on whether it will ever be able to make a national debut.sumant.banerji@expressindia.com