Use of CNG declining despite talk about alternative fuel
Use of CNG declining despite talk about alternative fuel
Leony Aurora, The Jakarta Post, Jakarta
Despite constant talk about the need to revert to alternative
fuel amid soaring global oil prices, the use of compressed
natural gas (CNG) in the transportation sector is actually on a
decline, hampered mostly by expensive imported conversion kits
and lack of infrastructure.
State oil and gas firm Pertamina's general manager for
domestic gas, Edwin Bakti, said the government should promote the
use of the unsubsidized fuel.
"The government should assist (vehicle owners) to get
conversion kits," said Edwin on Monday, citing an import tax
reduction for conversion kits as one possible measure.
Ordinary vehicles cannot use the environmentally friendly CNG
in their engines but need to have a conversion kit installed.
Conversion kits for private cars cost Rp 7 million (about
US$716) to Rp 9 million, close to what an average Indonesian
earns in a year.
A conversion kit for a large vehicle, such as a bus or a
truck, costs even more at around Rp 20 million.
Indonesia is frantically trying to conserve fuel and is
looking for ways to do so as climbing oil prices -- which have
reached over $60 per barrel -- and increased consumption have
made the cost of the fuel subsidy balloon. This year, the fuel
subsidy may cost the government up to Rp 150 trillion, or about a
quarter of state budget expenditure, without concerted efforts to
reduce fuel usage.
Although the lack of CNG filling stations is another reason
that people are not eager to use gas in their cars, Edwin said
there had been no instruction from the government to build more
stations, nor would Pertamina take the initiative to do so.
"How can we invest when CNG is not selling well?" he said.
Pertamina data show that CNG sales in the transportation
sector decreased by 13 percent to 14,735 kiloliters gasoline
equivalent (klge) in 2004 from 17,001 klge in the previous year.
According to previous reports, of the 17 CNG stations built in
Greater Jakarta by Pertamina and private entities, only six are
still operating. The number of vehicles using CNG also dropped
from 1,500 in 2003 to 500 last year.
Sold at Rp 1,550 per liter gasoline equivalent, CNG is cheaper
than Premium gasoline, which retails at Rp 2,400 per liter thanks
to the subsidy.
"Even with such a price, people still consider gasoline cheap
enough without the hassle of using CNG," said Edwin.
The government has said that CNG use in the transportation
sector, which guzzles about half of all fuel used in the country,
cannot be introduced in the near future and serves as a mid-term
solution.
As a national pilot project, the Jakarta administration has
announced that it would use CNG in the 187 buses that will ply
Busway corridors II and III, which will connect Pulogadung in
East Jakarta and Kalideres in West Jakarta once construction of
the corridors are completed.
A preliminary study from Pertamina indicated that the measure
would save the state Rp 27.75 billion in fuel subsidy expenditure
this year, assuming the buses would otherwise consume 16,830
kiloliters of diesel fuel a year.
The study used assumptions valid in December 2004, when the
basic price for one liter of diesel fuel was Rp 3,749 while it is
sold at Rp 2,100 a liter.
The administration plans to develop two CNG stations, namely
in Rawa Buaya, West Jakarta, and on Jl. Perintis Kemerdekaan in
East Jakarta to cater to the needs of the planned Busway
vehicles.