ESCALATING oil price hikes have fueled political unrest in both advanced and developing economies recently, as people protest galloping inflation and the higher cost of basic living.
And while Singapore has remained socially unruffled, vehicle owners have certainly felt the pinch in their pockets from the higher cost of driving. The price increase is particularly acute for diesel fuel users. Diesel, once an economical fuel choice, is now almost comparable to petrol price-wise.
As we went to press, diesel was being sold at $1.993 per litre, nearly double that from a year ago, while all grades of petrol were selling for more than $2 per litre, even after house discount.Faced with inflation and the implementation of new ERP gantries and charges, motorists here have started to look for alternatives to fight increased spending. And this has brought about a growing interest in converting to Compressed Natural Gas (CNG) operated vehicles.
CNG is made by compressing natural gas, composed mainly of methane (about 90%), to a pressure of up to 3600 pounds per square inch. In its natural state, it is lighter than air, odourless and colourless. As a safeguard to detect possible leakage, the gas is odourized before distribution.
Stored in a cylindrical fuel tank aboard the vehicle, CNG flows into the combustion chamber of the engine and is ignited to create power to drive the vehicle. When fitted into a vehicle, a CNG conversion kit allows the driver to switch between petrol and gas, even on the move.
Compared to petrol, CNG is less costly. It is also a much cleaner burning fuel, which translates to less vehicle maintenance and longer engine life.
Environmentally, it produces significantly less pollutants as natural gas vehicles reduce carbon dioxide emissions by approximately 25%, nitrogen and carbon monoxide emissions by about 55% each, and ozone emission by about 60%.Which is why it is now being touted as a means of reducing carbon emissions, thus aiding in the fight against global warming.
CNG officially graced our shores in April 2002 with the launch of a pilot CNG bus project, spearheaded by the Ministry of the Environment and Water Resources (MEWR), SembCorp Gas and SBS Transit. Taxi operator Smart Automobile became part of the CNG initiative with the introduction of the nation’s first fleet of 30 CNG-powered taxis in December 2005.Despite great fanfare and a favourable response from the public for a greener commuting experience, true converters to CNG had been few and far in between.
One compelling reason for this was the lack of CNG stations on the island. Indeed, there was only one until the start of this year, on Jurong Island.
The mainstream Press recently highlighted the problem, with many disgruntled car and fleet owners publicly decrying the lack of refilling outlets.
But all that is set to change.The first 'mainland' CNG station was opened in February at Jalan Buroh by Sembcorp Gas and Singapore Petroleum Company, followed two weeks later by the opening of the largest CNG station in Mandai by Smart Energy.
Plans are underway for another CNG station at Serangoon North by Smart Energy in January 2009.
And Sembcorp Gas, buoyed by demands that have exceeded its expectations at the Jalan Buroh station, is also looking for suitable locations to set up more stations.
Actually, incentives to convert to CNG have been available for some time.
In January 2001, the government launched its Green Vehicle Rebate (GVR) scheme to promote conversion to environmentally-friendly vehicles and to support clean technologies.This was reviewed in 2005 and again in 2007 by several government agencies (Ministry of Finance, Ministry of the Environment and Water Resources, Ministry of Transport, Land Transport Authority and National Environment Agency).
Currently till 31st December 2009, the GVR allows private car owners to save 40% on their open market value (OMV), if they purchase a car which has been converted before registration. For commercial vehicles, the savings of OMV is pegged at 5%. Other tax incentives enjoyed by green vehicles are a special tax exemption for CNG vehicles, and road tax of petrol equivalents instead of diesel equivalents for hybrid, electric and CNG commercial vehicles.
Up till now, though, motorists have sat on the fence, preferring to let others pioneer the conversion trend.But the recent surge upwards of fuel prices has acted as the catalyst to catapult many of them over the fence and into CNG.
“Right now, petrol costs 25 cents per kilometer while CNG costs 15 cents per kilometer. The savings becomes especially substantial for those with high mileage,” he says.But not everyone is convinced about the financial viability of switching.
Depending on the size and composite material of the cylinder, prices generally range from $4000 to $7000. For some, the savings from fuel to cover that initial investment does not justify installation.
Ms Theresa Lee, an apparel supplier with13 years of driving experience, has baulked at the idea of converting to CNG.
She says: “Even though my business requires me to travel a fair amount everyday, it will still take some time for me to recoup the cost of installation just from fuel savings. Besides, the time and effort that I will need to set aside just for making my way back and forth the current gas stations feels more like a hassle and depletion of my resources than a bonus.”
However, the lack of infrastructure is no deterrent for others.
For instance, Yeap Transport Pte Ltd, a school bus service operator, plans to purchase a fleet of CNG buses as part of the company’s business expansion programme. (See sidebar story).
Many others contacted by G+ believe there are both compelling longer-term economic and altruistic reasons to switch over and are currently making plans to do just that.
“Right now, for us, there are no immediate economic benefits in switching. Indeed, the cost of conversion will add greatly to our costs.
“But we do see great benefit down the road – and to stay in business we need to look ahead, rather than only at the immediate term,” one logistics industry executive told G+.
