Few refuelling stations, poor conversions among factors deflating demand
Christopher Tan, Straits Times 21 Sep 10;
INTEREST in compressed natural gas (CNG) cars has fizzled out after a brief spurt.
The trend can be blamed on a number of factors - the languishing car market, a persistent shortage of refuelling facilities, negative publicity over poorly carried out petrol-to-gas conversions and even the uncertainty hanging over the tax break granted to such cars.
The numbers from the Land Transport Authority (LTA) say it best: Only 25 or so CNG cars were registered in the first eight months of this year, down from 250 last year and 2,000 the year before.
From January to August this year, all other alternative-fuel cars were more popular than CNG models. Petrol-electric hybrids pulled in about 500 new buyers, and diesel cars, about 40 - despite the high taxes payable on them.
Buyers of budget cars have traditionally been the biggest CNG converts, but this year's deep cut to the supply of Certificates of Entitlement (COEs) sent their premiums skyrocketing. The car market cooled in response, nudging out such price-sensitive buyers. Sellers, particularly the parallel importers, were also hit.
A senior executive from authorised Toyota agent Borneo Motors observed: 'Parallel importers have lost steam because of the high COE prices.
'Ninety-nine per cent of CNG cars were sold by them.'
General Motors Overseas Distribution Corp, the importer of Chevrolet cars, stopped offering CNG models in March.
Its spokesman said customers were turned off because the savings they were to reap from using gas instead of petrol did not make up for the inconvenience of having only limited places where they could refuel.
There are four refuelling stations in operation: in Jurong, Mandai, Toh Tuck (off Upper Bukit Timah) and Serangoon North. This is twice the number of stations available before last year, but they can hardly be said to be centrally sited.
Customer service representative Wong Chee Wei, who drives a CNG Chevrolet Optra Magnum, said of the refuelling hassle: 'There's always a long queue at the Serangoon station.'
For better or worse, he is stuck with his CNG-model Chevy for now, because he finds car prices too high for him to trade it in.
Mr Melvin Toh, 28, a wealth management consultant, has the same model car, but has taken to using its petrol engine 60 per cent of the time. He said: 'Ideally, I'd want to use more CNG, but the nearest station for me is Serangoon, and it closes quite early, at around 8pm.'
He also feels that the high COE prices mean changing his car is not an option now.
C Melchers, a company specialising in converting petrol cars to run on CNG, is feeling the drop in interest acutely. Its sales manager, Mr Gilbert von der Aue, said the company is doing only about two conversions a month, down from as many as 120 two years ago.
'Things are not so good,' he said. 'I don't think conversions will go back to what they were like.'
He said it has not helped that some of Melchers' smaller rivals have done 'bad installations', which have resulted in adverse effects such as severe power loss or stalled engines.
The LTA said 16 car owners with such problems have been allowed to remove the CNG systems from their converted vehicles, thus reverting to petrol-only vehicles.
'Applications for the removal of CNG systems are considered on a case-by- case basis,' an LTA spokesman said. Permission is granted only if the technical problems cited are found to be genuine.
And then there is the looming uncertainty over the tax break granted to CNG cars, which is due to run out at the end of next year.
The 40-percentage-point reduction in the Additional Registration Fee was what fuelled the surge in the number of CNG- converted cars in the last two years. The Government also plans to levy a petrol-like duty at gas pumps from 2012.
Only taxi companies seem to be driving any sort of momentum in CNG conversions now. About 460 new CNG cabs were put on the road in the first eight months of the year. The strongest advocate is Trans-Cab, which plans to treble its CNG fleet of about 1,500 by next year.
Taxi firms and a small but growing fleet of private gas-powered buses are keeping the CNG refuelling business afloat.
Mr Johnny Harjantho, the managing director of refueller Smart Energy, which operates the Mandai and Serangoon stations, said: 'Our business has been growing, but we need 1,500 fillings a day to make money. Right now, we are getting 800 to 900, sometimes 1,000.
'We still need more support from the Government, especially in providing sites for new CNG stations.'
