The merits of the idea can always be argued. There are supporters as well as opponents to the idea of switching to CNG. The efficacy of the idea however needs no argument. The switch to CNG to mitigate or to some extent lessen the economic burden of the masses has failed to bring about the desired results.
I feel the bigger issue is about who actually ends up using CNG. There is the general perception that CNG is a poor man’s fuel and the shift from petrol was initiated to enable the lower income groups to benefit.
However, while that may have happened in some cases, for the most part, the real beneficiaries of CNG, regardless of what price it is being sold at, are those who were never really less privileged or ‘poor’ to begin with. And this becomes quite obvious when one sees long lines of Corollas, Citys, Civics and other expensive cars, including fancy SUVs lined up to get CNG. I tried, I really did, but I could not come up with any economic rationale to classify these people as less privileged.
In fact, the less privileged do not usually own cars. The less privileged do not use taxis and rickshaws. The less privileged either use motorcycles or public transport to get to work or go about their daily commute. And I think we can safely argue in today’s economic environment that anyone who can afford nothing more than a 800cc car also falls within the domain of middle or lower middle class. Motorcycles do not use CNG. And while transporters have made the shift from diesel to CNG in large numbers, fares have not been reduced to reflect this change.
So we have established that the idea is probably flawed, based on the fact that it has not worked. That can be as a result of two things. One is that the idea was based on unsound economic principles to begin with, or the execution was flawed. I believe that in this case the idea was workable, and still is workable. It could have made a change, but the execution was pathetic. I cannot be clearer than that.
But before I go into that, let’s take a second to figure out exactly how much one saves off CNG and if it really is worth the hassle, the conversion cost, and the increased engine maintenance cost. Let’s use some rounded off numbers and peg the price of Petrol at Rs100 and the price of CNG at 90, closer to where it was before the Supreme Court intervened to reduce prices. The reason I am using that as a peg is because current prices are interim, and they will in all likelihood be revised upwards based on the new formula being proposed by Ogra.
On average – barring extreme exceptions – the daily mileage racked by most car owners is usually not more than 50 kilometres. So that means about 5-6 litres of petrol consumed, Rs500 to Rs600 spent. A car running on CNG, would travel the same distance using about 4-5 kilogrammes of CNG. This translates into Rs360 to Rs 450 spent on a daily basis. I have based this on the average consumption of a 1300cc car. This translates into daily savings of Rs150, monthly Rs4,500.
Is this really meaningful for someone who can afford a Rs1.5 million car, or Rs2 million? And factor in the fact that the car owner invested in the CNG conversion kit and also pays more on the maintenance of the engine as a result. It really doesn’t make economic sense to me. Most of us can easily save more than this or even more by resorting to other means like saving on electricity consumption, driving less, carpooling, or buying a smaller car. But I guess this means a measure of self-discipline but that’s no fun is it?
The government has to put its foot down to insist that the savings made by public transport owners - since the shift to CNG and LPG - be passed on to consumers.
The mass-shift to CNG in private cars without any regulation which has resulted in the current shortage is also the government’s fault. They can still fix it. I believe any car with an engine capacity over 800cc should not be allowed to run on CNG. It should be restricted to mass public transport and not even prime movers. It certainly should not be allowed in Civics, Corollas, Citys and SUVs. If one can buy an expensive car, one probably is and should be willing to pay the cost of running it. If you can’t, then buy a smaller car!
Published in The Express Tribune, November 19th, 2012.
COMMENTS (14)
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@Saeed why dont we people also talk about robbery being done by mobile companies? every time we load a card about 5% Service charges and 8% admin fee is deducted along with government taxes..where this admin and service charges are going ?in the pockets of mobile companies owners!!!!!! Why Fertilizer companies do not past or display Price of Urea Per Bag and same is the case with Cement Bag? why they are charging expensive rates from us despite of the fact that they are getting much cheaper gas than cng stations and provide less tax to government ( i.e at 16 % )?
@Disappointed That's a different argument. Right now we're talking about fixing this problem, or at least making it less painful for the majority. Banning CNG for cars still doesn't deprive car owners of their mobility. All it means is that they'd be forced limit their driving to weekend outings with the family when the car is utilized more efficiently(carrying more people). We wouldn't be stopping them from riding the bus with us. As for the industrialists. What do you suggest? Should we cut off all power to them. That'd be real great for our already flailing manufacturing sector(sarcasm).
@Saeed: Your thought might be innocent, but the idea of banning CNG for cars also sound lobby-ish. It is not between cars and buses but between the middle class/ lower middle class and those big industrialists who are enjoying cheap gas for ages and are now playing in unbelievable riches.
Hours before a CNG shutdown Number of buses at the CNG station: 1 Number of cars at the same CNG station: 100
The people making these insensitive comments about public transportation should try taking the bus to work for a week.
I have been waiting for an article like this for a long time. All private cars should be banned from using CNG. If they can't afford petrol, they can use the buses like the rest of us do. These CNG shutdowns are a nuisance for those of us who take buses to work as the Bus owners don't run their buses in case of a CNG shutdown and we are left stranded on Bus stops. Car owners get to their work without much hassle as they can fill their car up on petrol. Us regular folk on the other hand are the mercy of bus owners who refuse to run their buses at a loss.
To all those car owners crying for Public Transport to switch back to diesel, why don't you switch back to petrol. What excuse do have to use CNG? We use it cause we're poor and can't afford our own cars, you on the other hand can surely take a bus.
@obaid i totally agree with you anyone with PRADO ,LANDCRUISER OR CIVIC VTI PROSMATIC (2010 TO ONWARD ) would not like to wait for his turn in longgggggg ques along with Rikshas and busesss. and those who do wait are very very rare ( even our five fingers are not alike )
Which world do you live in.? Well off people still prefer to use petrol and would never get into the hassle of long lines and reduced engine power. There are a small number of well off car owners who out cng in their car. Small number. N a person may own a 10 year old corolla or civic which isn't worth any more then a Mehran. Does your formula take account of that? If anything, public buses should not be allowed to use cng. Diesel or cng is a small part o transporting cost anyway. This is why the savings from using cng in buses has never been reflected in its price. Not to mention the dangers that these kits bring to buses since the assembly is usually poor.
I think the CC should not to be considered because you can buy an old model with 1600 CC car on 350K in the market less than Suzuki Mehran 800CC. I think Price should be considered not the engine capacity. As i have Daihatsu Charade 1300CC which i bought on 300K. If i am wrong please correct me. thanks
to presume that anyone who owns a large capacity vehicle is rich is not correct. one could cite several cases for the same if need be. the increase in the consumption of cng is due to its use in commercial vehicles without giving its benefit to the common passenger as installing it in these vehicles at considerable cost to pass the benefit on also does not make economic sense. the solution therefore would be to ban its use in commercial vehicles which action would be easily implementable by the administration.
Exception aside, in my experience CNG is mostly used by the people who are at the lower end of the middle class, so to say. Those who can afford, still for the expensive fuel for various reasons. Generalizing exceptions does not make a good case and shows that the public opinion is being influences by lobbies, imo...
Very well written totally agreed.
Makse sense to me :)
Or clarify this, if OGRA is now hurridly conducting (half-baked) audits, an readjusting its prices, why couldn't it do it in the last 5 years? Why did the media not take OGRA to task? Vested interests? You bet.
So, at least we are now debating CNG as an issue in the media, just like drones were discussed after IK brought it forward as an issue, and declaration of assets, and democracy within a party (intra-party elections).
If the CJP hadn't intervened, would we be discussing CNG today? NO, we would have queietly accepted our fate. Tell me I'm wrong.