Soaring prices decrease attractiveness of CNG as fuel of choice – Journal


KARACHI: Running compressed natural gas (CNG) vehicles for gasoline to cut travel costs has lost its appeal, as some stakeholders say the economy has fallen to just five percent while others say it is almost zero.

CNG was introduced in Pakistan in 1992 with great fanfare as an alternative and environmentally friendly fuel with the main objective of reducing expensive gasoline imports. For rapid development of this sector, the Musharraf government announced massive incentives in 2002, including duty exemptions on CNG plants and equipment, kits and cylinders. As a result, investors have set up CNG stations across the country amid a booming demand for fuel and has it been used to save more than 50% in costs compared to vehicles running. to gasoline.

However, with growing uncertainty about the availability of CNG amid severe gas shortages coupled with a skyrocketing price, a large number of passenger car owners have switched to gasoline despite the fact that both the cylinder and the kit remain intact in their vehicles.

Gasoline regains its status as the main fuel for vehicles

“After the latest increase, gasoline sells for 123.30 rupees per liter, but CNG still saves 5%,” said Ghayas Paracha, group leader of All Pakistan CNG (APCNGA).

In Punjab and Islamabad, CNG is sold at an average price of 121 rupees per liter. Despite very low savings, commercial transport owners and 20% private car owners still rely on CNG, he added.

Mr Paracha said the influx of imported 660cc second-hand vehicles equipped with EFI engines and high mileage had also taken a heavy toll on the demand for CNG as these vehicles cannot be converted to gas. .

The government allowed the import of CNG kits and cylinders last year after maintaining a long ban. With time ; new kits have been invented for EFI engines thus ensuring higher mileage than gasoline, but consumers are still hesitant to use these new kits, he said.

APCNGA coordinator for the Sindh area, Samir Najmul Hussain, said the days when private car owners saved 50% by using CNG for gasoline are over.

“Today there is no economy. Running the vehicle on CNG and gasoline is the same, ”he asserted, adding that CNG sales of 15 mmcfd in Sindh compared to pre-Covid sales of 70-90 mmcfd are sufficient to justify a massive switch to gasoline.

He recalled that the savings from CNG were 30% when gas was available at Rs 123 per kg, but now running a gas vehicle at a price of Rs 165 to 180 per kg in Sindh presents no appeal to consumers.

Mr Hussain claimed that more than 40 CNG outlets have closed in Sindh due to the low turnover of vehicles, which prevents owners from incurring huge expenses in electricity bills, labor wages. -work, etc.

He said the demand for CNG in Punjab is now 30mmcfd, up from 170mmcfd in 2014 when local natural gas was used. After the switch to RLNG in 2017, CNG sales in Punjab were estimated at 60mmcfd.

Karachi Transport Itehad (KTI) President Syed Irshad Hussain Bukhari said 95% of large private buses, minibuses and coaches were running on CNG when fuel was available at Rs 123 per kg a few months ago.

“Now carriers have switched to diesel after the sky-rocketing price of gas,” he said, claiming that 60% of public transport is now on CNG and 40% on diesel, as Rs 165-180 per kg of gasoline is not feasible for large vehicles. The total number of large buses, minibuses and coaches in Karachi is around 4,500. However, the price of diesel rose from Rs 110 per liter to Rs120 in January.

Despite the lack of clearance from the Sindh government, public transport owners hiked fares by Rs 5 on average last month to offset the impact of rising diesel and CNG prices.

A number of rickshaw owners have said they have stopped using CNG due to lingering anxiety over non-availability, especially in winter and even summer amid unbearable prices.

However, consumers are in limbo. Previously, rickshaw owners charged higher fares due to rising CNG prices. Over the past few months, they have found another excuse to charge more money by citing rising oil prices. In January, gasoline was available at Rs106, compared to Rs123.30 per liter currently.

Most rickshaw owners charge extra money by ensuring that passengers drive a rickshaw on gasoline rather than gasoline, while there are still a number of rickshaw owners- grows that still use gasoline and charge higher prices. Regardless of whether gasoline or gasoline is used, rickshaw owners charge Rs 500 for a trip of 12-13 km instead of Rs 400.

Whether CNG saves money or not, there has always been a dark side to using CNG to destroy gasoline engines over time, as no CNG engine has ever been developed. until now by foreign car assemblers. The money saved by consumers on the use of CNG was ultimately wasted due to the repair of the engine after an interval of two to four years depending on the intensive operation of the vehicle on gas.

For vehicles of 800 to 1000 cm3, the remake of the engine costs between 30,000 and 50,000 Rs, while it costs more on vehicles of 1300 cm3 and more.

Pakistan had recorded record gasoline sales of 0.731 million tonnes in May despite early market closures and the Eidul Fitr holiday, reaching 0.755 million tonnes in June and record sales 0.81 million tonnes in July . In August, gasoline sales amounted to 0.733 million tonnes. In July-August, gasoline sales increased by 10% to 1.549 million tonnes compared to the same period of 2020. Diesel sales in July-August had increased by 18% to 1390 million tonnes.

Posted in Dawn, le 19 September 2021

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