January 16, 2007	Tuesday	Zilhaj 25, 1427

KARACHI, Jan 15: The government’s decision to cut petrol price by Rs4 per litre from January 15 is not likely to impact the investment scene in the CNG sector.

The decision will not discourage investors from putting money in the CNG sector while conversion of vehicles to CNG from petrol will continue unabated, observers said.

However, cut in petrol rate will reduce the margin of saving on cars using the CNG. The percentage of saving on a CNG car was 52.70 before a cut in petrol prices.

The saving has now shrunk to 50.7 per cent after Rs4 per litre benefit to the owners of cars running on petrol, chairman CNG Station Owners Association (CNGSOA), Malik Khuda Bux told Dawn on Monday.

But in case the Oil and Gas Regulatory Authority (Ogra) comes out with a decrease in gas prices in coming days, the saving factor could increase again, he said.

“Cut in petrol prices will not affect the conversion of vehicles from petrol to CNG,” Malik said adding that the petrol price depends on the geo-political situation. The government will enhance the petrol price in case world oil prices climb again owing to any uncertain situation in world’s politics.

He ruled out the possibility that investors would refrain from putting money in the CNG industry after petrol price cut. The CNG sector will continue to flourish despite cut in petrol prices, he added.

As many as 1.18 million vehicles have so far been converted into CNG as compared to one million vehicles in April 2006. By April 2005, there were 700,000 vehicles on the roads.

Currently, 1,131 CNG stations exist in the country as compared to 930 by March 2006. He said that some 4,000 licences have been issued to the new investors for setting up CNG stations, while 200 stations are in the process of construction.

Malik said an investment of Rs32 billion had been made in the CNG sector till now. The investment figure will jump by Rs12 billion in case 200 stations, that are being built, are included.

A large number of people have converted their petrol cars to CNG after meteoric rise in petrol prices during the last few years. Even at petrol pumps only motorcycle owners are seen filling their fuel tanks while there is hardly any rush of vehicles there.

People using CNG cars are still seen making long queues at the CNG stations due to problems of low pressure of gas from the gas utility and rising number of vehicles.

An executive in a leading Japanese car assembling unit, who asked not to be named, said that cut in petrol rates will not make any difference in the CNG booking of cars. He said that the company had been rolling out 70-80 per cent units fitted with CNG kit now-a-days as compared to 20 per cent vehicles on petrol.

Since the petrol became costlier there has been 25 per cent growth every year in booking of vehicles fitted with CNG.

“Despite cut in petrol prices, there is still a 50 per cent saving on CNG vehicles as compared to petrol,” he said adding that the CNG maintenance of CNG cars is cheaper as compared to petrol version cars.