Massive drop in sale of CNG kits

[LahoreEstate]

KARACHI, Jan 26: The falling price gap between petrol and CNG coupled with decline in the level of saving in a vehicle run on CNG against petrol CNG has resulted in a massive drop in the sale of CNG kits and cylinders.

The CNG kits’ shops, which used to witness a beeline a year back, have virtually lost the rush of buyers since the petrol price has declined sharply. Many people prefer to run their vehicles on petrol again for a better pick up and engine’s long life.

Many CNG shops have closed down in the city while others have pinned their hopes on the crude oil prices waiting for an upward trend so that petrol becomes costlier and customers could turn up once again to their shops. In case the petrol price does not come down they hope for a cut in CNG price.

A CNG kit dealer, who also owns a CNG outlet, said customers in the city used to install around 50-60 kits daily in their vehicles a year back, which has fallen to only 5-15 kits a day in Jan 2009.

However, he said his sales of CNG to vehicles had declined by 10 per cent in the last few months since customers have been switching over to petrol.

At a time of sagging kits demand the dealers have not offered any big discounts to the new customers of CNG kits.

“We are either waiting for the increase in petrol prices or cut in CNG price in coming months. There should be a big difference in the price of petrol and CNG,” he said adding the price of CNG kits varies between Rs23,000 to Rs60,000 with cylinders of various capacity, its quality and the country of origin.

He said importers of kits have also cut down the imports as they are more interested in clearing the old stocks.

Another kit dealer at the new M. A. Jinnah Road said that despite a difference in saving on CNG as compared to petrol, people are not coming in big numbers.

“I used to sell 10 kits a day in the good days last year. Now I hardly sell two to three and even some times sell only one kit a day,” he said adding that in the boom period he had sold out 12-14 kits a day.

He said that Suzuki Mehran 800cc runs 18-20 km in one kg CNG, while the same vehicle gives 10-13 km mileage in one litre of petrol.

Chairman CNG Dealers Association (CNGDA) Abdul Sami Khan said in 1992 there was a 50:50 difference in price between CNG and petrol. Now the government is promising to bring back the same difference in coming months.

He said Adviser to Prime Minister Shaukat Tarin and Adviser on Petroleum Dr Asim Hussain have assured the CNG dealers that the gas prices are likely to be reduced in March this year so that the gas could have an edge over petrol in terms of saving.

http://www.dawn.com/2009/01/27/ebr2.htm