Govt rolls out auto gas scheme as efficient fuel

The government has taken huge initiatives to make auto gas readily available, affordable and popular as an alternative transportation fuel.

As part of the move, a total of 2,550 LPG stations have been approved for auto gas, leading to a major change in the type of fuel consumption in the transport sector.

The move comes as the benefits of this alternative fuel are tangible – less transportation costs, cut in dependence on fossil fuels and environmentally friendly.

According to the Bangladesh Road Transport Authority (BRTA), the number of motor vehicles registered in the country is currently 49.72 million.

The transport owners and workers’ organisations estimate that around 3 million vehicles mainly use diesel, petrol, octane and compressed natural gas or CNG as fuel.

There are 538 CNG stations and 400 auto gas or LPG stations across the country. Private companies are building these stations.

As per the account of Bangladesh LPG Filling Station and Conversion Workshop Owners Association, the number of vehicles converted to auto gas so far is about 35,000 using around 5 lakh metric tons of auto gas every month.

The use of LPG (Liquefied Petroleum Gas) as car fuel started in 2005. For its being safe, affordable and environmentally friendly, the government adopted the policy of giving priority to it and stopped giving permission to CNG station, the rival of Auto gas.

Large corporate houses like Bashundhara, Omera, Beximco, BM, Petromax, Energypack were given licences to set up 2,550 auto gas stations across the country.

Experts suggest that in future, auto gas will become a viable alternative to CNG and fuel oil in Bangladesh. Apart from Dhaka, Chattogram, Sylhet and Mymensingh divisions, there are no other CNG stations, but auto gas stations have been approved across the country.

Md Rafiqul Islam, director general of the Hydrocarbon Unit, Energy Division, told The Business Post, “Using fossil fuels harms the environment which is not the case when it comes to auto gas that even keeps the engine function well.”

“Moreover the cost of our transportation is increasing day by day, and using auto gas will reduce the cost.”

What is Auto gas?

Liquefied Petroleum gas (LPG) is made from a mixture of propane and butane widely used in the country for a long time as a household fuel. When it is used in car, it is called auto gas that has a big reputation as a clean or green fuel. It is the main fuel for cars in developed countries.

Auto gas-CNG mileage

The auto gas capacity of a 1500cc car is 60 litres. Once fully recharged, a car can travel 400-450 kilometres on highway. It travels 300-350 kilometres in Dhaka. In contrast, a CNG-run car with a single cylinder can travel 80-90 kilometres.

At present per cubic metre CNG is priced at Tk 43 while the price of 1 litre auto gas is Tk 50.

Yet lackluster response

Despite the policy support of the government on one hand and the participation of big corporate houses on the other, the country’s auto gas sector is far from achieving success.

The sector people said success is elusive in the sector due mainly to rival fuel CNG. So far, about 35,000 cars have been converted to auto gas, and its stations are not being built in the same way as demand is much less. This is mainly due to price distinction.

The price of CNG was Tk 10 per cubic metre 10 years ago when the price of LPG was around Tk 50 per litre. Auto gas has been hit hard by the cheap fuel like CNG. The owners do not want to convert their vehicles to auto gas as they get CNG at a cheap rate.

Besides, 96 per cent vehicles are registered in Dhaka, Chattogram and Sylhet. On the other hand, auto gas has demand only in two other cities -- Khulna and Rajshahi -- besides the three divisional cities. Earlier also, LPG was not of much demand in the capital, in the port city and in Sylhet. However, in recent times the picture has begun to change.

Joint Secretary to the Department of Energy and Mineral Resources (Operations) Md Sher Ali said: “It is predicted that the country’s natural gas reserves will decrease at some point. That is why we are campaigning for the use of LPG or auto gas as an alternative fuel.”

“Moreover this gas is environmentally friendly. As a result, it will be a win-win for both environment and vehicles.”

Environmentally friendly and risk free

The government has adopted the policy of giving priority to auto gas as the fuel of vehicles taking into consideration a number of issues.

LPG has a worldwide reputation as a clean or green fuel -- main fuel for cars in developed countries, and many developing countries are also leaning towards it. The gas weighs one-third less than CNG while the risk of explosion is also much lower due to less cylinder pressure. Moreover, filling stations can be set up in any part of the country as auto gas is transportable.

According to the Department of Energy and Mineral Resources, the government will not approve any new CNG station. If anyone seeks approval for auto gas filling stations, the government will come up with policy support, technical and safety assistance.

Traders are importing and marketing LPG on their own initiative which is mainly used for household and vehicles.

Conversion costs

Converting high quality LPG costs around Tk 50,000. On the other hand, the cost of conversion to CNG is about Tk 90,000. At present, 200 to 300 vehicles are being converted to LPG daily in Bangladesh.

Mohammad Kamal Hossain, general manager, Omera Gas One, said they have 32 auto gas stations, each with conversion facilities.

“So far we have transformed over 1,000 vehicles. At present, 100 vehicles are being converted every month,” Kamal pointed out.

13 companies approved to set up 2,550 auto gas stations

The Ministry of Power, Energy and Mineral Resources has given approval to 13 LPG companies to set up 2,550 auto gas stations across the country. There will also be conversion centres with a number of stations where vehicles powered by fossil fuels can be converted to auto gas.

On condition of anonymity, several officials from the Department of Energy and the Bangladesh Energy Regulatory Commission (BERC) said: “The government has to take initiative for market management from now on, or else, in future we have to suffer the same way as we do with the household LPG,” they opined.

Operators’ agreement with state-owned oil company

Auto gas station operators have signed agreements with Padma Oil Company, Meghna Petroleum and Jamuna Oil Company under Bangladesh Petroleum Corporation (BPC).

Now the operators are supplying LPG to auto gas stations installed after signing contract with registered refueling centres.

An LPG operator is obliged to pay a royalty fee of Tk 1 for per litre LPG to BPC and oil companies for installing auto gas pumps in some 2,100 registered stations of the three companies.

In this regard, BPC Chairman Shamsur Rahman said: “This is a matter of the policymakers. We gave permission because they had decided on it. On the other hand, we are yet to have necessary infrastructure to bring auto gas.”

“We are importing LPG for Matarbari and Maheshkhali projects and arranging storage facility there. Besides, work has started on 10 acres of land in Latifpur, but these are not enough.”

The BPC chair went on saying that because of open market economy, the government may have given permission to the private enterprises.