Increased price, gas supply shortage 'hit CNG sector hard'
Tuesday, 25 November 2008
Mehdi Musharraf Bhuiyan
Increased price of compressed natural gas and the prevalent gas supply shortage are leaving their mark on the country's first ever "International CNG Exhibition' running in the city.
Talking to FE over the outcome of the fair, a great number of the major participating companies have expressed discontent over the response they are receiving from the prospective buyers and clients of the CNG filling stations, which are overwhelmingly dependent on adequate supply of natural gas.
At the same time, the country's leading CNG conglomerates have expressed their concern over the ongoing and possible future downturn in their sales of CNG fuelling stations in the wake of confusion about the country's natural gas reserve and the government's unwillingness in providing approval to new fuelling stations.
"Investors at the moment are shying away from setting up CNG fuelling stations because of the government's reluctance to provide approval as well as the uncertainty and apparent shortage in the supply of gas," Anisur Rahman, general manager of Rahimafrooz CNG Ltd. told the FE.
"This year, we are fearing our sales of CNG fuelling stations will drop by around 50 percent from that of last year due to this trend," Anisur observed.
His voice was echoed by some other major CNG conglomerates like Intraco CNG Ltd and Getco who also stressed the need for proper seismic survey of the country's existing gas fields to evaluate the actual gas reserve and to explore new gas fields to ensure self-sufficiency for the near future.
"Until now, no one looks to be pretty sure about the country's actual gas reserve, which, according to some estimates could be finished by 2015. This casts a shadow over the future of a highly potential energy sector and the CNG sector in particular," an official of Intraco CNG Ltd said.
"In the prevailing situation, the government must step forward for the proper seismic surveying of the country's existing gas fields as well as the need to explore new gas fields and, at the same time, should equip BAPEX with adequate funding with a view of that," said a senior executive of GETCO.
Participants at the fair have also expressed their discontent over the rising price of compressed natural gas, which, they say, is detrimental to the expected growth of CNG-driven vehicles.
"If the country's CNG sector continues to be halted by increasing gas prices; people would gradually turn their faces away from an environment-friendly vehicle option and would switch to imported diesel," said M A Rois Siddique of Bangladesh CNG Filling Station & Conversion Workshop Owners Association.
Referring to the readjustment of CNG price earlier this year, he observed, "Previously we had to buy gas at a price of Tk. 2.75 per cubic metre and sold it at Tk. 8.50. But now we have to buy gas at Tk. 9.95 and sell it for Tk. 16.75 per cubic metre".
The government readjusted the price of CNG in April this year, increasing it by nearly 200 per cent by stating that Petrobangla was incurring huge losses by selling CNG much below its purchasing price.
The recent years have seen an overwhelming adoption of compressed natural gas as the principal mode of transport fuel in the country. A total of 1,46,735 vehicles, according the official figure of Rupantarita Prakritik Gas Company Ltd. (RPGCL) are driven by CNG, served by 130 workshops and 296 CNG fuelling stations across the country.
At the same time, the average use of CNG all over the country, according to the official figures stands at 62.92 million cubic metres per month, saving foreign currency worth of Tk 604.03 million every month.
Increased price of compressed natural gas and the prevalent gas supply shortage are leaving their mark on the country's first ever "International CNG Exhibition' running in the city.
Talking to FE over the outcome of the fair, a great number of the major participating companies have expressed discontent over the response they are receiving from the prospective buyers and clients of the CNG filling stations, which are overwhelmingly dependent on adequate supply of natural gas.
At the same time, the country's leading CNG conglomerates have expressed their concern over the ongoing and possible future downturn in their sales of CNG fuelling stations in the wake of confusion about the country's natural gas reserve and the government's unwillingness in providing approval to new fuelling stations.
"Investors at the moment are shying away from setting up CNG fuelling stations because of the government's reluctance to provide approval as well as the uncertainty and apparent shortage in the supply of gas," Anisur Rahman, general manager of Rahimafrooz CNG Ltd. told the FE.
"This year, we are fearing our sales of CNG fuelling stations will drop by around 50 percent from that of last year due to this trend," Anisur observed.
His voice was echoed by some other major CNG conglomerates like Intraco CNG Ltd and Getco who also stressed the need for proper seismic survey of the country's existing gas fields to evaluate the actual gas reserve and to explore new gas fields to ensure self-sufficiency for the near future.
"Until now, no one looks to be pretty sure about the country's actual gas reserve, which, according to some estimates could be finished by 2015. This casts a shadow over the future of a highly potential energy sector and the CNG sector in particular," an official of Intraco CNG Ltd said.
"In the prevailing situation, the government must step forward for the proper seismic surveying of the country's existing gas fields as well as the need to explore new gas fields and, at the same time, should equip BAPEX with adequate funding with a view of that," said a senior executive of GETCO.
Participants at the fair have also expressed their discontent over the rising price of compressed natural gas, which, they say, is detrimental to the expected growth of CNG-driven vehicles.
"If the country's CNG sector continues to be halted by increasing gas prices; people would gradually turn their faces away from an environment-friendly vehicle option and would switch to imported diesel," said M A Rois Siddique of Bangladesh CNG Filling Station & Conversion Workshop Owners Association.
Referring to the readjustment of CNG price earlier this year, he observed, "Previously we had to buy gas at a price of Tk. 2.75 per cubic metre and sold it at Tk. 8.50. But now we have to buy gas at Tk. 9.95 and sell it for Tk. 16.75 per cubic metre".
The government readjusted the price of CNG in April this year, increasing it by nearly 200 per cent by stating that Petrobangla was incurring huge losses by selling CNG much below its purchasing price.
The recent years have seen an overwhelming adoption of compressed natural gas as the principal mode of transport fuel in the country. A total of 1,46,735 vehicles, according the official figure of Rupantarita Prakritik Gas Company Ltd. (RPGCL) are driven by CNG, served by 130 workshops and 296 CNG fuelling stations across the country.
At the same time, the average use of CNG all over the country, according to the official figures stands at 62.92 million cubic metres per month, saving foreign currency worth of Tk 604.03 million every month.