Studies revealed that the worldwide Compressed Natural Gas (CNG) and Liquid Petroleum Gas (LPG) market have been categorized in three broad segments such as passenger cars, light commercial vehicle market, and others. On the basis of fuel type the market is further segmented in LPG and CNG. Different sources recorded that the LPG and CNG vehicle is gaining penetration in developing states attributed to low-cost of CNG and LPG over growing prices of petroleum products. People who use these vehicles know that vehicle engine which utilizes CNG or LPG as a secondary fuel is termed as CNG and LPG vehicle.
It is also important to note that internal combustion engines running on CNG or LPG are well-proven technologies and work similar to conventional fuel-powered spark ignition engines. The experts also mentioned that both are mostly utilized in spark-ignition engines for bi-fuelled vehicles. No doubt, these vehicles are also getting popularity in compression-ignition engines based vehicle like diesel operated heavy-duty vehicles.
|Natural Gas Vehicle (November 30, 2018)|
According to the international source, there are now greater than 23 million NGVs in the world. Growth is forecast to exceed 30 million by 2024. The Experts furthermore recorded that CNG and LPG operated vehicles are considered as a green alternative of petroleum operated vehicles. As the bi-fuel options offered LNG and LPG vehicles make them one of the preferred choices among customers, chiefly in terms of saving in running costs. Moreover cost benefits of CNG and LPG coupled with significant carbon emission reduction is predicted to raise the LPG and CNG market worldwide. Statistics concluded that Asia Pacific is the largest market for CNG and LPG vehicle followed by Europe and North America. Iran, India, and Pakistan are the major market of CNG and LPG vehicles in Asia pacific. Italy is the largest market of CNG and LPG operated vehicle in Europe. It is also concluded that the present growth is highest in Asia Pacific and it is moreover predicted that price conscious consumers coupled with growing crude oil prices in this region would keep the growth rate steady during the forecasted period. The strict emission standard by European Union (EU) is driving the market of CNG and LPG in Europe. In Pakistan, the government officials recorded that the government had primarily appreciated the usage of CNG as an alternate fuel for automobiles in order to control environmental degradation, decline foreign exchange expenditure on import of liquid fuel and generate career opportunities.
Recently, it is also recorded that Pakistan has become the world leading CNG user country and statistics also showed that greater than 3,416 CNG stations have CNG marketing licenses in Pakistan. Statistics also showed that a large number of people, apart from the public transport industry, depend on CNG fuel for their automobiles. However, the ministry also registered that in view of the mushroom growth of CNG stations in Pakistan vis-à-vis depletion of natural gas reserves, there has been a ban on establishing of new CNG stations since 2008. However, for sustainable growth of this sector, the present government has accepted provision of RLNG to this sector with fiscal incentives of GIDC at the rate of zero and sales tax at the rate of 5.0 percent.
Sources also mentioned that the federal government is planning to further raise the price of natural gas. CNG is approximately 20 percent cheaper than petrol. Any raise in CNG prices would lead to vehicles shifting from CNG to petrol. Sindh and Khyber Pakhtunkhwa are self-sufficient in natural gas production. And another hike in CNG prices would suppress the masses as it is mostly used in low-end traffic vehicles.
Statistics also noted that during 2019 CNG is priced highest in Punjab at Rs127 because of the use of Re-Gasified Liquefied Natural Gas (RLNG), while it is Rs117 per kg in KPK, and Rs104 per kg in Sindh. The CNG prices were raised by PKR 22 per kilogram last year. Historically, CNG was launched to Pakistan in the 1990s, at a time when Pakistan’s natural gas reserves were perceived as an unlimited source of fuel.
The experts also mentioned that seen as economically viable in comparison to the heavily taxed and constantly fluctuating prices of petroleum, CNG quickly gained popularity with owners of large public-sector vehicles also school vans and buses, which could easily accommodate the bulky equipment.
Statistics recorded that this year OGRA jacked up the price of indigenous LPG by Rs 95 per 11.8kg domestic cylinder in March 2019 as the price is recorded 11.8kg domestic cylinder to Rs 1,522.65, which was Rs 1,427.63 in February 2019. Presently, in different parts of the country including main urban centres, the LPG is being sold for more than Rs 2,300 per 11.8kg cylinder.