CNG pumps, conversion units feel heat of frequent price hike
Wednesday, 16 November 2011
Jubair Hasan
CNG (compressed natural gas) conversion and filling stations are scrambling to stay afloat as the government continues to spike gas prices. Owners fear that the Tk 150-billion-sector would be collapsed if the government further raised the price of CNG, which has already afflicted pain on hundreds of entrepreneurs. "We the people in the sector can't survive as our main customers have started switching back to the liquefied fuels," owner of Southern Auto Mobiles Manoranjan Bhokta said, adding that many of their fellow men have already closed down the business. "Now, I'm thinking of closing down the unit as the number of CNG conversion clients has declined sharply after the 70 per cent price-hike in the current year," he said. According to Southern Auto Mobiles located at Tejgaon in the city, at least 20 vehicles were converted into CNG a day in 2008. But it is not getting two vehicles a day for conversion. "This is the scenario of the country's each conversion unit. Expensive machinery worth Tk 5 billion remains idle in my godown," he said. Sanji Group, one of the leading business conglomerates in the sector had 10 CNG conversion workshops at various parts of the country. The group closed down six of the units over the last 12 months after suffering huge financial losses. Owner of Sanji Group SM Jahangir Alam Manik said another unit of the group may be shut in the coming month due to drastic fall in the number of CNG conversion vehicles. "The government's plan for further raising the CNG prices will be a suicidal one for the industry," he said. He also said around 90 per cent of small and medium conversion centres and filling stations have already shut business due to repeated hike in the prices of CNG. "Only 8-10 big players in the sector are surviving somehow and the rest are on the verge of closure." Currently, around 90 per cent of the city's total transports depend on CNG and the sector consumes only 2.5 per cent of the country's total consumption of 2000 million cubic metres per day, they claimed. The government increased CNG prices twice by 50 per cent on May 12 and 20 per cent on October 19 this year. Now, prices of per cubic meter stands at Tk 30, which was Tk 8.15 in 2008. The situation in the units located outside the capital is worse as many highway buses - the main consumers of the green product - started re-consuming diesel and petrol after removing the gas cylinders as CNG is no longer economically viable due to frequent price-hike. Owner of Comet CNG Limited Nur Nabi Chowdhury said S Alam Paribahan recently discarded gas cylinders from its 100 buses. "A number of such companies are following the suit. So, how can we survive," he said, adding that the government should give instruction to all the commercial vehicles to use CNG like other countries before any further price-hike. Owner of SS Filling Station Sayeda Akhter said the government should refrain from taking any measure that will destroy a sector. "Business in my filling station has come down by nearly 50 per cent in recent time. I will not be able to continue it anymore if the government raises CNG price again," she said. General Secretary of Bangladesh CNG Filling Station and Conversion Workshop Owners' Association Zakir Hossain Nayon said most of the owners have sold machinery of their units to meet up the high rate of bank interest. "And their number is increasing gradually. It's not a good sign for any sector. The government should take the matter seriously for the welfare of the industry. The country has 585 CNG filing stations and 170 conversion workshops that generated employment of more than 15,000 people in remote areas where the employment opportunity is limited.
CNG (compressed natural gas) conversion and filling stations are scrambling to stay afloat as the government continues to spike gas prices. Owners fear that the Tk 150-billion-sector would be collapsed if the government further raised the price of CNG, which has already afflicted pain on hundreds of entrepreneurs. "We the people in the sector can't survive as our main customers have started switching back to the liquefied fuels," owner of Southern Auto Mobiles Manoranjan Bhokta said, adding that many of their fellow men have already closed down the business. "Now, I'm thinking of closing down the unit as the number of CNG conversion clients has declined sharply after the 70 per cent price-hike in the current year," he said. According to Southern Auto Mobiles located at Tejgaon in the city, at least 20 vehicles were converted into CNG a day in 2008. But it is not getting two vehicles a day for conversion. "This is the scenario of the country's each conversion unit. Expensive machinery worth Tk 5 billion remains idle in my godown," he said. Sanji Group, one of the leading business conglomerates in the sector had 10 CNG conversion workshops at various parts of the country. The group closed down six of the units over the last 12 months after suffering huge financial losses. Owner of Sanji Group SM Jahangir Alam Manik said another unit of the group may be shut in the coming month due to drastic fall in the number of CNG conversion vehicles. "The government's plan for further raising the CNG prices will be a suicidal one for the industry," he said. He also said around 90 per cent of small and medium conversion centres and filling stations have already shut business due to repeated hike in the prices of CNG. "Only 8-10 big players in the sector are surviving somehow and the rest are on the verge of closure." Currently, around 90 per cent of the city's total transports depend on CNG and the sector consumes only 2.5 per cent of the country's total consumption of 2000 million cubic metres per day, they claimed. The government increased CNG prices twice by 50 per cent on May 12 and 20 per cent on October 19 this year. Now, prices of per cubic meter stands at Tk 30, which was Tk 8.15 in 2008. The situation in the units located outside the capital is worse as many highway buses - the main consumers of the green product - started re-consuming diesel and petrol after removing the gas cylinders as CNG is no longer economically viable due to frequent price-hike. Owner of Comet CNG Limited Nur Nabi Chowdhury said S Alam Paribahan recently discarded gas cylinders from its 100 buses. "A number of such companies are following the suit. So, how can we survive," he said, adding that the government should give instruction to all the commercial vehicles to use CNG like other countries before any further price-hike. Owner of SS Filling Station Sayeda Akhter said the government should refrain from taking any measure that will destroy a sector. "Business in my filling station has come down by nearly 50 per cent in recent time. I will not be able to continue it anymore if the government raises CNG price again," she said. General Secretary of Bangladesh CNG Filling Station and Conversion Workshop Owners' Association Zakir Hossain Nayon said most of the owners have sold machinery of their units to meet up the high rate of bank interest. "And their number is increasing gradually. It's not a good sign for any sector. The government should take the matter seriously for the welfare of the industry. The country has 585 CNG filing stations and 170 conversion workshops that generated employment of more than 15,000 people in remote areas where the employment opportunity is limited.