It started with a war.

Of the 22 Indian vessels stuck near the Strait of Hormuz a few weeks ago, six carried liquified petroleum gas, four were crude oil tankers, and one had natural gas. 

Coincidentally or not, this spotlights the country’s import priorities as the world, at large, grapples with prolific fuel shortages. To tide over, South Korea and Japan are increasing their reliance on coal, and Thailand and Vietnam have pushed for remote work. Closer home, Pakistan has hiked petrol prices by over 40%.

India, meanwhile, turned to Russia for crude oil, and ringfencedMinistry of Petroleum and Natural gasGazette Notification the supply of compressed natural gas (CNG) for its priority sectors, including household and transport.

This comes as critical support for Indian carmakers.

In less than a year, stricter Cafe-3 emission norms are expected to force automobile manufacturers to cut their carbon-dioxide (CO₂) output. The current average CO₂-emission target of nearly 113 g/km is already difficult to meet because the market is still heavily reliant on conventional fuels like petrol and diesel.

Miss the target, and the penaltyFinancial ExpressMahindra flags Rs 5,000 crore CAFE 3 risk runs into hundreds of millions of dollars.

Electric vehicles were meant to ease much of this compliance burden, but their adoption has been slower than expected.

This is where CNG is becoming an unlikely saviour—for both the government and carmakers.

While India spentFinancial ExpressCrude oil imports bill up 2.7% to $137 billion in FY25 nearly $137 billion importing over 240 million tonnes of crude oil in FY25, its natural-gas imports were estimated to cost only about $15–20 billion. If the war drags on, a marginal increase in oil prices would add over $60 billion to the import bill. But a rise in LNG prices would add only a tiny fraction of that.

And for automakers, a vehicle running on CNG emits nearly 19% less CO₂ than a petrol variant, helping them comply with the emission norms.

© The Ken