Vehicles converting to autogas as oil prices soar

The unprecedented price hike of fuel oil, coupled with a shortage of natural gas, have made gasoline to LPG fuel conversion quite popular among vehicle owners across Bangladesh, indicated by a significant rise in autogas kit installations taking place at conversion centres.

Autogas or LPG is short for liquefied petroleum gas, which is either propane or butane. Bangladesh meets 97 per cent of its demand for autogas through imports. Meanwhile, natural gas is primarily methane, and is used by CNG-run auto-rickshaws as fuel.

Industry insiders say the use of autogas in vehicles did not increase as expected in the domestic market due to the price gap, high conversion costs and a lack of awareness to use this cleaner fuel.

After its introduction in 2003, the use of autogas in vehicles managed to reach only 5 per cent of total LPG usage in Bangladesh up until recently. But due to the energy crisis – a ripple effect of rising inflation triggered by the Russia-Ukraine war – the use of autogas started booming.

Industry insiders say autogas is a cleaner-burning fuel that does not contain acids or leave behind carbon deposits. It can increase the life of a car’s engine as well.

Speaking to The Business Post, Omera Gas One Ltd General Manager Kamal Hossain said, “We have 32 autogas stations across the country and our monthly sales doubled to 1,000 tonnes in 2021 when compared year-on-year.

“We have conversion facilities at almost every of our refueling stations. So far, we have converted more than a thousand vehicles from gasoline to autogas. During 2018 to 2019 – in the pre-Covid period – we used to convert five to six vehicles per month. But since the last few months, we have been converting 30-35 vehicles monthly.”

Chattogram-based BM LPG does not own any LPG conversion centres, but they have approval to run 50 such establishments belonging to other companies.

BM LPG’s General Manager (Sales & Marketing) Alok Kumar Pandit said, “The number of vehicles converting to autogas from gasoline has recently gone up by 15 per cent to 20 per cent, compared to the figures recorded just a few months ago.

“This shift is being fueled by the price hike of fuel oil and shortage of natural gas. Aside from the increase in autogas conversions, the LPG sales have also gone up by at least 100-150 tonnes per month.”

A good alternative to oil, natural gas

According to the Bangladesh Petroleum Corporation (BPC), the annual domestic demand of LPG is 1.5 million tonnes, and 97 per cent of this demand met by imports of private corporations.

The rest comes from condensate produced by domestic gas fields, distributed by three state run companies Padma Oil, Jamuna Oil and Meghna Oil.

To save valuable natural gas, the government began encouraging the use of auto gas as fuel in motor vehicles from the beginning of this century. As part of this initiative, the government banned the establishment of new CNG stations in 2015. The government also issued licences to conglomerates such as Bashundhara, Omera, Beximco, BM, Petromax, Energypac, allowing them to set up about 1,000 auto gas stations across the country.

On the issue, LPG Operators Association of Bangladesh (LOAB) President Azam J Chowdhury said, “Due to the fuel oil price hike and shortages of CNG, auto gas conversion in vehicles is increasing day by day.

“If the government keeps natural gas only for manufacturing sectors and encourages the use of LPG as an alternative for commercial and domestic usage, the autogas industry will see significant growth in the next few years.”

Number of autogas-run vehicles still low

According to data from the Bangladesh Road Transport Authority (BRTA), Bangladesh has around 4.4 million registered motor vehicles. Of this figure, 500,000 CNG-run vehicles refuel at 538 CNG stations across the country.

Data from the LPG Auto Gas Station & Conversion Workshop Owner’s Association reveal that the country has 750 autogas stations, which sale 7,000 to 8,000 tonnes of the fuel per month.

The number of vehicles – excluding three wheelers – running by autogas is around 20,000, a relatively low figure.

The association says Bangladesh’s transportation sector used 60,000 – 65,000 tonnes of autogas in 2021, which may exceed 90,000 tonnes in 2022 due to the increase in fuel oil prices. A high quality LPG conversion costs around Tk 60,000, which is Tk 70,000 for CNG conversion.

Industry insiders and transportation owners say the uncertainty surrounding LPG prices is the key reason behind low interest in using autogas commercially. Besides, autogas is more expensive to use in vehicles compared to CNG.

An average 1,500cc vehicle can run 12 km with per cubic metre of CNG. But vehicles using autogas need 1.5 cubic metres of the fuel to go the same distance, which currently costs Tk 73. This is why many vehicle owners are reluctant to switch to autogas.

Khandaker Enayet Ullah, secretary general of Bangladesh Road Transport Owners Association, said, “Autogas price fluctuates. It may be low now, but there is no guarantee that the price will remain stable in the coming days. “That is why transport owners do not usually convert their vehicles to autogas.”