CNG car sales race ahead as petrol prices soar

Over 800 units sold in past 6 months compared to just 34 for whole of 2007
Samuel Ee, Business Times 16 Jul 08;

SALES of CNG cars are continuing to power ahead this year, with the number of such vehicles in the first six months soaring to 804 from a mere 34 for the whole of last year.

According to the Land Transport Authority, there were 1,564 bi-fuel cars on Singapore roads as at end-June. June was also the hottest month in the first half of this year for such cars, with an all-time high of 124 units registered.

Bi-fuel cars can run on both petrol and CNG (compressed natural gas). Mercedes-Benz is the only car maker that offers a CNG model - the E200 NGT (Natural Gas Technology) - direct from the factory. The rest of the petrol-engined cars here have been retrofitted with gas tanks and injectors so that they can also operate on CNG.

As petrol prices soar, more and more buyers of new cars are converting their vehicles to run on CNG, which is less expensive.

Apart from lower running costs, such retrofitted cars also attract a green vehicle rebate, currently set at 40 per cent of OMV (open market value). This means its list price will also be lower, thus outweighing the CNG conversion cost, which can range from $3,400 to $4,500, depending on the size of the gas tank installed.

But the price of CNG is also rising fast because it is pegged to the price of high sulphur fuel oil (HFSO). Last week, it cost $1.59 per kg at Smart Energy, one of two CNG refuelling stations in Singapore. On Monday, the price rose to $1.73.

'The higher cost of CNG will definitely affect the demand for CNG cars because the price difference compared with petrol is reduced,' says Johnny Harjantho, managing director of Smart Energy.

But he says that the mileage gains from CNG versus petrol will continue to make it a popular alternative, 'especially for those who travel a lot'.

Mr Harjantho says that on average, a 2.0-litre car can travel about 250km on 18kg of CNG, for a cost per km number of 12.5 cents. For that same distance, the 2.0-litre car will need an average of 27.78 litres of petrol, or 23.4 cents per km using the cheapest fuel grade at $2.102 per litre.

One parallel importer also believes the popularity of CNG cars will remain strong.

'Current demand is overwhelming,' he says. 'For every 10 enquiries about new cars, six or seven are for CNG models.'

He adds that the waiting time for the installation of a CNG kit used to take two weeks two months ago. 'Now, the queue time is two months,' he notes. 'Look at it this way - one full tank of petrol for a 1.8-litre MPV costs $80 to $90. With CNG, it's about $40 or half the price. So, of course, you will go CNG.'