18 July 2012

Mozambique: Still Only a Handful of Vehicles Run On Natural Gas

Maputo — Despite the massive fuel savings that can be made by converting vehicles to run on natural gas rather than on petrol or diesel, to date only about 500 light vehicles in Mozambique are operated by gas.

In addition 150 buses purchased from India arrived in the country with their engines already converted to use gas.

Data from 2010 put the number of vehicles in the country at 300,000. So only 0.2 per cent of Mozambican vehicles can run on locally produced natural gas rather than on imported liquid fuels.

Cited by the independent television station STV, the company that provides the gas, Autogas, lamented that the amount of gas available for vehicles by far exceeds the amount that can currently be used.

Autogas is not giving up, however. Currently only two filing stations provide natural gas (one in Maputo and one in the neighbouring city of Matola), but Autogas expects to have a network of 195 filling stations across the country dealing with its gas in the next ten years.

"Our plan is to increase the number of consumers, and expand our services throughout the country", declared the chairperson of the Autogas board, Octavio Muthemba.

The advantages of using gas seem obvious, both for the country and for individual motorists. Autogas calculates that, if there were a massive switch from petrol and diesel to gas, the country would save 550 million dollars a year on import costs at the current price of liquid fuel. This would cut the bill for imported fuel by 60 per cent.

For motorists, the advantages are equally clear. Currently petrol costs 47.52 meticais (1.7 US dollars) a litre, and diesel 36.81 meticais a litre. The equivalent amount of natural gas only costs 17.75 meticais.

In other words, anyone who owns a petrol-driven car would cut his fuel bill by 63 per cent if he switched to natural gas. A saloon car that uses 140 litres of petrol a month costs its owner a fuel bill of 6,653 meticais a month - a bill that would fall to 2,485 meticais a month after conversion to run on natural gas.

A 15 seater minibus, such as those used in Maputo passenger transport, currently spends 28,512 meticais a month on fuel, if it uses 600 litres of diesel. The cost would fall to 10,650 meticais a month if it ran on gas.

So why do the huge majority of motorists continue to spend their money on petrol and diesel? The answer is that there is a heavy initial capital outlay in converting engines to run on gas. To convert a Toyota Corolla, Autogas would charge 49,000 meticais. Anyone who cannot afford this could opt to pay 6,600 meticais a month over 18 months - which is a total of 118,000 meticais.

Converting a minibus would cost 60,000 meticais upfront, or 216,000 meticais spread over 12 months.

Motorists interviewed by STV all took the short term view that such sums were too large and they could not possibly afford the conversion. Yet if a Toyota Corolla owner, who currently uses 140 litres of petrol a month, pays 49,000 meticais for the conversion, it would take him just a year to recover that money through lower fuel costs.

The case of the minibus using 600 litres of diesel a month is even clearer - the 60,000 meticais paid for converting to gas would be recouped through lower fuel costs in less than four months. Since owners of minibus-taxis (colloquially known as "chapas") are forever moaning about the price of diesel, one might have thought it was an economic imperative for them to switch to gas. But apparently economic rationality is not their strong point.

The argument that there are currently only two places where gas-driven vehicles can refuel is not a very strong one. For the conversion provides the vehicle with a dual system - it can still run on petrol or diesel if necessary. If the vehicle ran out of gas, it could switch to liquid fuel for the trip to the nearest Autogas filling point.

Autogas managing director Joao das Neves argued that the government should intervene to promote conversion to gas - but he feared that the government pays greater attention to the requirements of the distributors of liquid fuels (the largest of which, Petromoc, is state-owned), who regard Autogas as an unwelcome competitor.

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