Technology Transfer Company
LPG Auto gas to fuel CNG sector Liquefied Petroleum Gas (LPG) autogas is an emerging fuel for transportation sector could replace the needs of CNG and petroleum products alike in passenger cars and public vehicles in an affordable way provided that the government considers gas mix process at fast track process. The substitution of fuel from (Compressed Natural Gas) CNG to LPG will not only conducive for the masses to consume comparative cheap fuel against costly petroleum fuel but it will be helpful for the government and private sector to develop the facility for the masses against controlled import bill and investments. So far there are merely five LPG stations have been established in the country with slow pace work by private sector for providing kits but the sector could easily shoulder the burden of limited CNG to LPG. The government and investors are looking for LPG autogas as a new sector that could revive the losing-making sector in the future as if CNG sector did. In past 7-8 years ago, the CNG has been developed to provide cheap and environmental friendly fuel to masses for vehicles. The then government waived duties on the kits and provided incentives for establishment of CNG stations related to taxes. This attracted local investment and expanded the sector across the country with 3,100 outlets at present to cater 4.5 million base of CNG-run vehicles, which made Pakistan a top country with most CNG-powered vehicles. The Foreign Direct Investment (FDI) in CNG kits and transportation have been increased in the period of last many years however with the limited reserves and supplies shortfalls to multiple sectors-- Textile, Fertilizer and Cement, the CNG sector have come under fire with government policy despite its shares stood mere at 6.5 percent in the overall consumption of natural gas. The investors of the CNG sector said that country saved more than $5.5 billion foreign exchange that it would have used on the import of petroleum products. The yearly and monthly loadshedding of CNG has become made routine in the country and consumers and investors of CNG sector incurred losses and suffered difficulties which intensified with the passage of time since 2008-09 onwards. The potential of LPG autogas is immense in Pakistan, no doubt, because the option of CNG and petrol has not become viable for businessmen and consumers of these two fuels, said Malik Khuda Baksh who has been active member of FPCCI standing committee on energy sector. LPG autogas could fill the gap easily and it is affordable also as far as petroleum products prices are concerned whereas this gas is produced indigenously and used in a disorganized way in various sectors. Hence the gas could be exploited in transport sector as well as industries to meet the growing need of energy resource of these two sectors. The adoption of LPG autogas is difficult in start but it will be viable gradually in the future as similar as CNG. But the development and progress of the sector will be contributed by various factors including its promotion at massive level by Government through awareness among public, policy and incentives for stakeholders for the owners of CNG and LPG stations. At present CNG owners are incurring losses in the case of seasonal and weekly closure of their business. There is no choice for them to continue their business in losses but to go for alternative fuel of LPG autogas either with CNG or without CNG as separate LPG autogas stations. The investment cost varies depending on infrastructure. If a CNG station owner installs LPG dispenser, it will take maximum Rs 5 million to establish a setup side by side with CNG having availability of space and infrastructure. But a new entrant needs a capital investment of more than Rs 15 million including cost of land and different infrastructure. CNG station owners and petrol pumps owners could set up LPG autogas facility depending on the area of station which allows a businessman to offer variety of fuel at his stations. It is because of safety aspect which is a foremost condition for setting up LPG fuel facility at station as congested filling stations could not bear to establish tanks and dispenser at one place. It is imperative for any CNG station for a wide area in which he could setup dispenser of LPG autogas, its associated tank and equipment along with already existing CNG dispenser. And I believe there are thousands of stations could avail the opportunity of starting new product at their outlets. I suggest CNG owners, whom I know are incurring huge losses paying heavy interest payment and rent of space for stations, to set up LPG stations to revive their business and cater the demands of growing transport sector of the country. This is the sole way to survive in the business of energy sector and get advantage of variety of fuels. However, the business of fuel will remain profitable with different fuels, he said. For government, I suggest keep the franchise policy open for establishing LPG autogas dispenser by fuel filling stations. The government should relax license policy and promote extensively LPG sector as similar it was done for CNG sector but did not regulate the price to keep the market free. Besides the government should make the import of associated equipment duty free and provide soft-loan facility for CNG station owners from banking industry. Most importantly, the government should not make delay any further and carry out all necessary measure for long-term basis. LPG autogas will be a viable option for consumers after ban imposition by the government for manufacturing of CNG cars and cylinder in Pakistan. Moreover there will be huge potential that a number of CNG-run vehicles could be converted into LPG fuel. Because a large number of CNG run vehicles among 4.5 million are hardly getting cheap gas but with extremely difficulties. The consumer price of LPG gas will be affordable. It will costly than CNG but cheaper than petroleum. The automobile companies could also produce cars with LPG fuel tanks to attract their purchaser and many customers could replace their CNG kit from LPG in future. All we need are pumps and LPG autogas availability at their for consumers.