LKR Knowledge BaseBy LKR Advisors — a plain-english ledger of Indian business
Oil & Gas
Concept #011

CNG: Compressed Natural Gas

Why so many autos and cabs quietly switched fuels

Oil & Gas·beginner·1 min read·Updated July 2026

Imagine squeezing the same amount of gas into a much smaller tank simply by pressing it harder, so a vehicle can carry enough fuel for a real trip without needing an impossibly large cylinder onboard. That compression is exactly what turns ordinary natural gas into CNG, a fuel dense enough to actually power a car, bus or auto rickshaw.

CNG is natural gas compressed to high pressure and dispensed through dedicated filling stations, run by City Gas Distribution companies such as Indraprastha Gas in Delhi or Mahanagar Gas in Mumbai. It became popular in Indian cities first as a pollution control measure for public transport and taxis, mandated by court orders in some metros, and later spread on its own merit as a genuinely cheaper fuel per kilometre than petrol or diesel.

Every CGD company's investor pitch leans heavily on CNG station count and volume growth, since vehicle fuel, not household PNG, is usually the larger and faster growing part of a city gas company's business.

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