It will be costly for Jamaica to switch from gas to CNG

Sep 26, 2008 02:00 AM

Even with the removal of VAT and other taxes, the high cost of compressed natural gas (CNG) conversion kits plus the scarcity of CNG compressors at gas stations may act as an obstacle in the Jamaica Government's vision of expanding the use of CNG by members of the motoring public.
Esmond Forde, service manager of the only local company which presently supplies and distributes CNG conversion kits -- Automotive Components -- told it would be "challenging" to inveigle motorists to start using compressed natural gas over gasoline, since the cost of converting vehicles from gas to CNG is very expensive, even if VAT is removed from CNG conversion kits.

In her 2008/2009 budget presentation, Finance Minister Karen Nunez-Tesheira said Government proposed to remove the Customs Duty and Value Added Tax (VAT) on conversion kits and further proposed to convert all public service vehicles to CNG usage.
With VAT and customs charges, Forde said, it currently costs around $ 10,000 to install the kits, which include a 70-litre cylinder placement in the vehicle's trunk and 115 driving miles. However, he said the high cost of the service permitted about 1 % of Trinidad and Tobago's driving population access to the kits.

"There are approximately 500,000 vehicles in the country, but only about 5,000 of those run on natural gas at this point," Forde said. Of this 5,000, he said, clients sometimes needed to secure loans to get their vehicles modified. He also explained that it took a considerable amount of time to outfit vehicles with the kits.
"It takes about a day to outfit a vehicle, usually it works out to be 20 cars for a month," said Forde.

With hopes of progressively reducing the Government's $ 2.4 bn fuel subsidy, CNG is being promoted as a cheaper, more environmentally safe fuel alternative to petroleum gasoline. The finance minister also said that they would be implementing measures to increase the number of service stations and geographic distribution of stations offering CNG, over the next two years.
Forde said Government would need to move swift, since most gas stations were not yet properly equipped to administer the fuelling of CNG. He said facilities at his company enables re-fuelling in three minutes and has been certified by the Ministry of Energy since 1992.

"If not properly equipped, it would take around ten minutes to fill one car with CNG, and the long waiting time has always been a deterrent to switch to CNG," Forde said.
Chief executive officer National Petroleum Marketing Company Limited (NP), Richard Callender however said that arrangements were presently being put in place to facilitate efficient CNG fuelling at NP stations.
"We presently have nine stations that are dual and over the next two years, we would like to have three stations dedicated to CNG fuelling only, as well as five other dual stations," he said. Callender also said that a NP's stations in the Beetham and San Fernando would be further upgraded with efficient fuelling facilities in a couple of weeks.

Source / Jamaica Gleaner
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