The application of alternative fuels in automobile engines is gaining more popularity among the scientific community than ever. Most of the research emphasis is on the performance and combustion aspect of the engine. The environmental and economic evaluation of these fuels is also equally important for sustainability, which is relatively unexplored and needs to be evaluated. The present work compares the environmental and economic aspects of a spark ignition (SI) engine fueled with gasoline and compressed natural gas (CNG). To study the environmental impact, regulated and unregulated emissions coming out from the engine exhaust were compared. For economic assessment, annual fuel consumption and associated fuel cost were compared under similar engine operating conditions. The economic cost associated with the environmental impact was calculated based on carbon dioxide emissions and compared using carbon pricing. Experiments on an SI engine were performed at various engine loads to achieve a range of operating conditions to evaluate fuel consumption and engine-out emissions. Results show that a CNG fueled engine has 12.7% lower brake specific fuel consumption than the gasoline engine, which leads to 56% lower fuel cost. It is due to the cumulative effect of higher calorific value and the lower fuel price of CNG compared to gasoline. Additionally, average environment emission and associated cost due to carbon dioxide (CO2) emission reduced by 29% using CNG over gasoline. This study shows that CNG can lead to lesser fuel consumption and its associated fuel and environment cost compared to gasoline.