Competition from cars run on LPG
Ask a Delhi taxi driver and he will probably tell you he'd rather convert his cab to run on Liquefied Petroleum Gas (LPG) than Compressed Natural Gas (CNG).
The reason for this has more to do with money than any technical understanding of the advantages of LPG over CNG. Estimates published in India suggest the price paid for an LPG conversion kit at Rs6-10,000 ($140-230) is only a third of that paid for a CNG conversion kit between Rs30-35,00 ($700-820).
For operators who work on small margins, this is a significant difference. No doubt CNG compares favourably to the use of petrol - but can the same be said when compared to LPG Research by Daewoo shows that the costs of running a CNG-driven vehicle is Rs0.49 per kilometre compared to Rs1.92 for a petrol driven car - 30% cheaper.
Published research conducted elsewhere reveals that LPG is cheaper. One estimate suggests that the distance covered by one litre of petrol costing Rs26 would cost only Rs8.12 using CNG and Rs7.94 using LPG.
Another important issue surrounding CNG is availability. Can Delhi-based Indraprashta Gas - better known for supplying piped gas to residential households - set up enough CNG filling stations in Delhi in time to meet the March 2001 deadline set by the Supreme Court Talks are underway between Indraprashta, Ashok Leyland, Gas Authority of India, and British Gas-owned Gujarat Gas - which pioneered CNG distribution in Gujarat - to set up a distribution network.
By contrast, LPG filling stations in Delhi are already well established - albeit illegally.