Petrol prices hiked again, time to step on the gas?

The second raise in less than two months is expected to trigger further demand for CNG kits, giving suppliers in Delhi a reason to smile.

One man's loss is another's gain. With oil companies on Thursday increasing prices of petrol by Rs 1.82 per litre from midnight, there's little cheer in the populace. However, traders and mechanics dealing in Compressed Natural Gas (CNG) kits and their retrofitting in vehicles have reason to smile. The price hike has come as a blessing in disguise for them as the demand for conversion of petrol cars to CNG is going up by 30-40 per cent every month. The sharp increase in petrol prices has triggered demand for Compressed Natural Gas (CNG), which is about 70 per cent cheaper based on actual cost and mileage.

Representative pic

The ten-month period from January to October 2011 has witnessed a phenomenal increase in the number of CNG vehicles. According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), with petrol prices going up by 65 per cent since January 2009, vehicle owners in Delhi, Mumbai, and Gujarat are increasingly opting for CNG and LPG vehicles. On an average, one can save around Rs. 6,000 to 8,000 a month by shifting from petrol to CNG.

Representative pic

In Delhi, around 6,000 to 8,000 vehicles are switching to CNG every month, accelerating the growth in demand for compressed natural gas by up to 20-25 per cent a year in the region. "On an average, about 3,000 petrol cars are being converted to CNG per month against the average of 2000 cars per month before March 2011. CNG is very easy on the pocket and you save around 60-70 per cent money on fuel. We have witnessed a rise of around 30-35 per cent in demand of adding CNG kits to vehicles already on the roads," said Gurdeep Saini, owner of MBK Motors at Karol Bagh who runs three auto garages.

Asif, owner of Lucky Motors, a leading CNG retrofitting outlet at Lajpat Nagar said, "People want higher fuel efficiency as prices of petrol and diesel are increasing. In Delhi a CNG kit costs Rs 50,000 for a Euro-IV petrol car and Rs 30,000 for the older vehicles. Sales are booming. Business has gone up by 25-35 per cent in the past 3-4 months."

ASSOCHAM also said that in the last 6-7 years, only 228 CNG filling stations have been set up in Delhi. Ideally, until today over 650 CNG filing stations could have been added to Delhi region only. The 228 CNG dispensation centres currently cater to CNG requirements of over 4.5 lakh vehicles of which approximately 2.5 lakh are domestic customers and remaining are commercial clients, the report says.

All gas
The demand is not just for old cars. More and more customers are looking to purchase CNG-fitted vehicles. "We were expecting this to happen. That's why our CNG-based models have been consistently doing well. But the recent demand has increased the waiting period for CNG models, says an official of Maruti Suzuki India. India's largest carmaker launched five petrol cars - SX4, Alto, WagonR, Estilo and Eeco - with CNG-integrated injectors to meet the demand. Working their strategies around shifting consumer behaviour in urban areas, several carmakers have now loaded CNG technology into their popular models such as Hyundai Accent, GM Aveo, Toyota Innova and Corolla, Tata Indica and Indigo in order to tap the growing demand.

Rs 68.66
Price per litre of petrol in Delhi
Rs 32
Price of a kg of CNG
Approx. no. of CNG vehicles in Delhi

Money on object
When most people are turning to cheaper fuel, India's luxury car market is seeing remarkable changes with the launch of two high-end sports cars this week. Looking to tap the fast-growing Indian market, Italian luxury sports car maker Automobili Lamborghini SpA on Thursday launched its latest model, the Lamborghini Aventador LP700-4, priced at Rs 3.69 crore (ex-showroom, Delhi). "India is an emerging market for sports cars, which is evident from the successful Formula 1 race event. We have already received 20 bookings for the Aventador," said Automobili Lamborghini SpA Marketing Manager, South-East Asia and Pacific, James Page. Launched globally in March this year, the Aventador has received 1,500 orders worldwide so far, he said, adding that the waiting period in India will be around 18 months. Recently Ferrari launched their four-seat grand tourer, the FF, at a price starting at Rs 3.42 crore. The FF offers a 6.3-litre V12 engine that makes a staggering 660PS and 657Nm of torque. 0-100kmph is reached in 3.7 seconds, and it won't stop accelerating until 335kmph. Delivery time for the FF is around one year, but Ferrari hopes to bring that span down as much as possible.

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