Cheaper fuel loses favour

By SCOTT MacLEOD

Compressed natural gas is dying as a vehicle fuel - even though petrol prices are skyrocketing.

The big four petrol companies say they have slashed the number of CNG pump sites because of dwindling demand.

Caltex now operates six sites, down from 60-odd in the fuel's heyday in the 1980s, and Mobil says it has "just a handful" left.

Shell and BP say they no longer supply CNG, although some independent operators do sell it from their sites. CNG was selling for 89c a kilogram in Auckland yesterday, which works out to about 70c a litre. Petrol prices have risen 50 per cent in six months, to about $1.20 a litre of unleaded 91-octane, and LPG is selling for the equivalent of 65c.

The next CNG site to close in Auckland is expected to be at the BP in Newmarket.

Owner Don Hutchison said he was planning to quit by the end of the year, and he expected BP to close his CNG pump. He had already sold two of his three compressors to Pakistan.

"We were selling $1700 a day 10 years ago, and now it's $100. It's going to die, for sure."

The secretary-general of the International Association for Natural Gas Vehicles, Dr Garth Harris, said New Zealand had lost its position as a world leader in using CNG.

The number of vehicle conversions had plummeted since 1986-87, when state initiatives promoting its use ended. Dr Harris said more than one million vehicles worldwide used CNG, including 500,000 in Argentina, 300,000 in Italy and 100,000 in the United States.

"At the moment it's still going down in New Zealand," he said.

The Land Transport Safety Authority said that at the end of last year just 830 vehicles were powered solely by CNG.

The benefits of CNG are seen to be its low cost and clean emissions. The drawbacks are sluggish power and the cost of converting vehicles to use the gas.

But some firms using CNG have made huge fuel savings. Hills Floorings, of Auckland, saves about $150,000 a year running its 70 vehicles on the gas. With every 1c rise in the price of petrol its savings go up more than $2000 a year.

CNG is also widely used for public transport in the Waikato.

Auckland mechanic Ian Perrott, who has been converting vehicles to alternative fuels since 1974, said CNG had "shot itself in the foot."

Energy firms had skimmed too much hydrocarbon out of CNG for other purposes, leaving it with less grunt and range than its rival, LPG.

Other users had been burned by dodgy conversions.