NEW DELHI - India plans to increase the use of compressed natural gas (CNG) in vehicles to reduce pollution from petrol and diesel fumes, officials said on Wednesday.
"Use of CNG is being encouraged as environment-friendly fuel," Oil Minister Mani Shankar Aiyar told parliament.
Domestic sales of CNG, which is cheaper than the liquid fuels it replaces, rose to 17 million tonnes in June from 13.6 million tonnes a year ago, but sales are limited to only a few cities as India has a shortage of natural gas.
CNG use is expected to hit diesel and petrol sales, particularly once domestic availability increases when two large gas fields begin production in the next five years.
"Subject to availability of natural gas and necessary infrastructure, CNG is proposed to be introduced in various cities in the country in a phased manner," Aiyar said.
About 94,000 vehicles in Delhi and 154,000 vehicles in Bombay run on CNG, while a smaller number of automobiles use the fuel in the western state of Gujarat and Andhra Pradesh in the south.
India's top gas transporter GAIL (India) Ltd., which operates CNG stations in Bombay along with Britain's BG Group, plans to set up CNG stations in more cities.
GAIL said on Wednesday it had signed a deal with Ashok Leyland Project Services, an associate of commercial vehicle maker Ashok Leyland Ltd., to set up CNG stations at home and abroad.
In May, GAIL said by December it would launch gas-powered vehicles in Lucknow and Agra, home to the Taj Mahal.
India's domestic oil product sales rose 0.6 percent in June compared with a year ago. Oil demand growth has been relatively sluggish in Asia's third-largest consumer, partly because many industrial consumers are switching to cheaper natural gas.
REUTERS NEWS SERVICE
