Material Insights · Understanding the Material World

Natural gas and Transport and logistics

Gas enters transport as compressed gas for cars, autos, buses and light trucks and as LNG for heavy trucks and ships; India has built a large CNG network and plans LNG trucking, but in China, the largest LNG truck market, battery trucks are now taking share from gas.

Natural gas (energy) and Transport and logistics (industry): 4 relationships.

How they are linked

1. Vehicle fuel

Physical flow · Medium · Natural gas → transport and logistics

CNG and LNG are cheaper and cleaner-burning alternatives to petrol and diesel for road vehicles and some ships; the site rates gas 4 of 5 for the fuel and energy suppliers that serve transport operators.

  • 1 enterprise type in transport and logistics that depends on gas
  • 4 of 5 criticality for fuel and energy suppliers (LNG and CNG fuel)

For most freight and passenger operators gas is one fuel option among several, so the dependence is concentrated in fleets that have already bought gas vehicles. Those fleets are tied to gas prices and refuelling networks for the life of the vehicle.

Enterprise types that depend on it:

  • Fuel and energy suppliers (diesel, bunker, jet fuel, charging): LNG and CNG fuel (criticality 4 of 5)

Sources: Material Insights

2. CNG in India

Substitution · High in India · CNG replaces petrol and diesel in Indian road transport

City gas licences oblige distributors to build CNG stations, and where CNG is cheaper to run than petrol or diesel, taxis, autorickshaws, buses and light goods vehicles switch.

  • 8,083 operational CNG stations in India, May 2025, against 814 in 2014-15
  • over 9.1 million CNG vehicles registered in India by November 2025, up from 2.3 million in FY15
  • 307 city gas geographical areas authorised, covering the entire mainland

The network build-out follows the PNGRB's minimum work programmes for city gas distribution, which tie station building to licences. CNG demand depends on its price gap with petrol and diesel.

Sources: Construction World

3. LNG for heavy trucks

Substitution · Rising · LNG replaces diesel in long-haul trucking

Liquefied gas carries more energy in a given tank than compressed gas, so it is the gas option for long-haul freight, competing with diesel on fuel cost.

  • about 1 million LNG-fuelled trucks in China, 2025
  • about 22 Mt LNG consumed by Chinese trucks, 2024
  • one-third share of India's heavy long-haul truck fleet the government plans to run on LNG within 5 to 7 years (2024 plan)

China built its LNG truck fleet quickly, and gas and LNG trucks took 35% of its heavy truck sales in the first half of 2024. India's plan starts from a low base, with 49 LNG dispensing stations in the first phase and LNG costs that vary by state because of tax differences.

Sources: International Institute of Refrigeration (IIR); Gas Processing and LNG

4. Electric trucks overtake LNG

Transition · Rising · Battery trucks → lower gas demand from trucking

Battery trucks cost more to buy than LNG trucks but are reported to save owners money over their life, and they now compete for the same long-haul market, so electrification caps how far gas can grow in road freight.

  • 22% battery trucks' share of China's new heavy truck sales, first half of 2025, up from 9.2% a year earlier
  • 6% fall in China's LNG truck sales reported by June 2025
  • about 18% price premium of an electric truck over an LNG truck in China

Electric trucks outsold LNG trucks in China for five consecutive months in 2025 and reached 28% of new truck sales by August 2025. This suggests LNG may be a bridge fuel in trucking, which matters for India's plan to put a third of long-haul trucks on LNG.

Sources: News4Jax

For investors

Key learnings

  1. India's CNG network grew about tenfold in a decade to 8,083 stations in 2025, giving city gas distributors a large, steady transport market.
  2. LNG trucking grew fast in China, with about 22 Mt of LNG used by trucks in 2024, but battery trucks overtook LNG trucks in sales in 2025.
  3. Gas demand from transport depends on the price gap with diesel and petrol, which taxes and gas pricing policy shape; LNG costs in India already vary by state because of tax differences.

What to track

  • CNG price against petrol and diesel: Running-cost case for CNG vehicles and city gas volumes (Monthly · city gas distributors, PPAC)
  • China heavy truck sales by fuel: Whether LNG trucks keep or lose share to battery trucks (Monthly · China Association of Automobile Manufacturers)
  • LNG dispensing stations in India: Readiness of the LNG trucking plan (Quarterly · oil marketing companies, PNGRB)

For policymakers

Key learnings

  1. Licence obligations under city gas distribution have driven CNG station building, a model that can be applied to LNG and charging corridors.
  2. Putting a third of long-haul trucks on LNG would raise LNG imports, so trucking policy is also gas security policy.
  3. China's quick shift from LNG to battery trucks suggests India should keep LNG trucking plans flexible and avoid stranded stations.

What to track

  • CNG vehicle registrations: Uptake of gas vehicles (Monthly · VAHAN)
  • CNG stations against minimum work programme targets: Progress of city gas distributors (Half-yearly · PNGRB)
  • LNG import volumes: Exposure of transport fuel to imported gas (Monthly · PPAC)

India

India had 8,083 CNG stations in May 2025 and over 9.1 million CNG vehicles registered by November 2025, and in 2024 it set a plan to run a third of heavy long-haul trucks on LNG within five to seven years.

Sources

  1. Transport and logistics: materials, Material Insights (2026)
  2. India expands CNG network to 8,083 stations nationwide, Construction World (2025)
  3. One million LNG-fuelled trucks in China in 2025, International Institute of Refrigeration (IIR) (2025)
  4. India plans to use LNG for third of truck fleet, in blow to diesel (Reuters), Gas Processing and LNG (2024)
  5. China's diesel trucks are shifting to electric. This could change global LNG and diesel demand (AP), News4Jax (2025)