The 'return' of petrol, diesel price hike: Can EV trucks, LNG fleet cushion oil shock in India? | EXCLUSIVE

Petrol, Diesel Price Hike: The Centre on Friday increased the petrol and diesel prices after nearly four years as state-run oil companies continue to feel the heat of surging global crude oil rates amid West Asia conflict.

Petrol and diesel rates were hiked by Rs 3 per litre and compressed natural gas (CNG) by Rs 2 per kg. The latest revision is believed to put pressure on household budgets, transport operators and logistics costs, with spillover likely on retail inflation.

India’s private gas-pump operators have either cut back diesel sales or hiked rates in response to advancing global oil prices, leaving the state-run refiners to struggle with the resulting surge in demand.

Meanwhile, the hike in fuel prices is expected to further give impetus to the EV trucks to operate in the national highway corridors.

Are electric trucks nearing parity in India?

Earlier this week, Bloomberg reported that the diesel crunch has left many Indian truckers stranded in roadside lines. Meanwhile, a latest report by C40 Cities and The Climate Pledge said that electric heavy-duty trucks in India are almost as affordable as diesel ones.

Currently, 55-tonne electric trucks cost just 3 per cent to 4 per cent more than diesel and that gap is expected to disappear within a year.

Smaller electric trucks (14 to 19 tons) could catch up in the next three to four years.

The Climate Pledge and C40 Cities have released the National EV Highway Guidance Framework, a roadmap that proposes a phased electrification of the busiest freight routes by 2027, starting with 20 priority highways identified by the Ministry of Heavy Industries.

The plan aims to expand charging infrastructure to major industrial centres and ports to create a fully electric national freight network by 2035.

With freight demand projected to increase over four times by 2050, the transition to zero exhaust emission trucks is positioned as a critical step to align with the national commitment to achieve net zero emissions by 2070.

The framework is based on insights gathered from the Laneshift pilot project, which tested the operational and commercial viability of electric freight. The pilot included a 6,500 kilometre run along the Golden Quadrilateral and over 600 trips covering 200,000 kilometres on the Bengaluru to Chennai corridor.

Electric trucks commercially viable for daily operations?

Data from the project indicated that electric trucks are commercially viable for daily operations exceeding 400 kilometres. The initiative also recorded a 4.2 times increase in electric truck orders from fleet operators signaling growing market confidence.

Representatives from C40 Cities stated that the pilot data demonstrates the commercial capability of zero emission trucks on long haul corridors, urging continued collaboration between government and industry stakeholders to scale deployment.

As the West Asia crisis and rising geopolitical risks have triggered supply disruptions, India is looking to expand LNG storage capacity, highlighting the need for greater energy security, the chief executive of the country’s largest gas importer, Petronet LNG, had said.

India imports about half of its natural gas requirement, which is used to generate electricity, make fertiliser, convert into CNG to run automobiles, piped to household kitchens for cooking and used as feedstock in a variety of industries. This gas is imported in its liquid form, called LNG, in ships from countries like Qatar and the US.

Since the start of the West Asia conflict, supplies from Qatar and the UAE, which accounted for about 40 per cent of all imports, have been affected, sending New Delhi scrambling for alternative sources.

Middle East disruption has lifted crude premiums, freight and insurance costs. A weaker rupee, meanwhile, has compounded pressure on the domestic fuel market.

(With inputs from Bloomberg and PTI)