Dolat Capital reports that electric vehicles (EVs) are gaining ground in city gas regions and are eroding compressed natural gas (CNG) market share while posing downside risk to piped natural gas (PNG) demand. The firm says EV registrations accelerated in the first half of 2026 and in some areas now exceed CNG registrations for Mahanagar Gas, Indraprastha Gas and Gujarat Energy. The trend may exert long term pressure on volumes and pricing for city gas distributors.

In Mahanagar Gas areas EV adoption rose by 470 basis points while CNG adoption fell by 422 basis points between February and June 2026. In Mumbai EV adoption reached 11.3 per cent in June while CNG adoption was 37 per cent and the average CNG rate for the first half of 2026 was 37.6 per cent versus 45.6 per cent a year earlier. The brokerage says EV registration is now at peak levels in some areas.

Delhi is more exposed after Delhi EV Policy 2.0 that stops registration of new CNG auto rickshaws from 31 December 2026 and bars new petrol, diesel or CNG two wheelers after 31 March 2028. Dolat estimates a long term CNG volume loss of 0.08 million standard cubic metres per day (mmscmd) for Indraprastha Gas. Near term, if registrations hold, extra volumes could be 0.3 mmscmd for Mahanagar Gas, 0.66 mmscmd for Indraprastha Gas and 0.51 mmscmd for Gujarat Energy. These represent about nine per cent, eight per cent and 17 per cent increases respectively.

On PNG the report notes Morbi, where 25 to 30 units plan to switch to propane that will be offered Rs 5 per standard cubic metre cheaper than PNG. Gujarat Energy plans to cut PNG prices by Rs 2 per cubic metre early in July and by a further Rs 4 by month end, with gross margins near Rs 6 per cubic metre. The brokerage warns that softer crude and spot liquefied natural gas (LNG) could bring faster PNG price cuts, leaving gas firms exposed on volumes and pricing.