Gas distribution companies are engaged in the distribution of gas for the purpose of domestic and commercial use. They supply gas through pipelines which is termed as Piped Natural Gas (PNG) for domestic and industrial use and they sell gas through retail outlets to Compressed Natural Gas (CNG) kits fitted vehicles. CNG kit fitted vehicles in India are mostly passenger cars and three wheelers in the current scenario and segments such as light commercial vehicles and Two Wheelers are now being designed to run on CNG due to economic feasibility and pollution free operation.
CNG proves to be a much safer alternative than both petrol and diesel because of a high auto-ignition temperature and an extremely narrow range of flammability that prevents it from accidentally catching fire on hot surfaces, thereby cutting down the chances of unexpected mishaps.
Mahanagar Gas Ltd. (MGL) in association with Eco Fuel (Indian Partners of Lovato, Italy) launched CNG fuelled two-wheelers to enable them to run on safe and economical fuel, thereby contributing to a pollution free environment.
MGL is one of India’s leading Natural Gas Distribution Companies. Established on 8th May, 1995, MGL is a joint venture between GAIL (India) Ltd and BGAPH (a subsidiary of Royal Dutch Shell Plc).
MGL has the distinction of pioneering Natural Gas distribution network in Mumbai and its adjoining areas. Over 0.8 million domestic customers are connected through a wide network of over 4400 kilometres which comprises of carbon steel (CS) and polyethylene (PE) pipeline. Domestic PNG is used for various purposes like cooking and water heating. It is also widely used by Hospitals, Nursing Homes, Hotels, Flight kitchens, Restaurants, places of Worship etc. PNG satisfies most of the requirements for fuel across all segments, being efficient, non-polluting and relatively economical.
The launch of CNG fuelled two wheelers would give an opportunity to more than 3.6 million two wheelers running in the Mumbai Metropolitan Region (MMR) to opt for the eco-friendly fuel of CNG. In the last few years CNG powered vehicles have grown in MMR at a compound annual growth rate (CAGR) of over 70% given the fuel economics and eco-friendly nature of CNG.
The CNG kit for two wheelers comprises of two CNG cylinders of 1.2 kg each, which can run up to 120 to 130 km per kg at an approximate cost of Rs 0.60 per km per single fill and is expected to be substantially economical as compared to a similar petrol run vehicle which has a cost of Rs.1.3 per km. In the initial phase, the scooters shall be retrofitted with a CNG kit manufactured by Lovato.
Presently two kit manufacturers namely ITUK & Lovato have got two-wheeler CNG kits approved by ARAI, Pune and ICAT Gurgaon respectively. Lovato has got approval for 18 scooter models of various original equipment manufacturers (OEMs) present in the market.
Lovato Gas S.p.A. manufactures internal combustion engines for motor vehicles and boats. The Company provides direct injection systems and accessories. Lovato Gas markets its products globally.
The growth would eventually pick up for fitting of CNG kits for two wheelers across other areas and give an opportunity for gas distribution companies and automobile kit manufacturers to increase their earnings. Gas distribution companies are already reaping the benefits of exclusivity of rights for gas distribution across various areas and regions in States. In addition to the existing segment of business of gas distribution for domestic and industrial purpose, supply of CNG fuelled two wheelers would add to the sales and profitability in the near future. The initial launch of CNG fuelled two wheelers is only in the Mumbai region but as soon as it gains traction two wheelers from other areas would be most likely to get the benefit. In a country that has the second highest number of two wheelers in the World, the opportunity seems big for Gas distribution and Automobile OEMs.