Taxis turn to nat­u­ral gas

Finweek English Edition - - INSIDE -

DRIVEN BY BOTH eco­nomic and en­vi­ron­men­tal pres­sures, the use of nat­u­ral gas in ve­hi­cles as an al­ter­na­tive to petrol is pick­ing up dra­mat­i­cally world­wide.

Ac­cord­ing to NGV Global, there are well over 1 6m nat­u­ral gas ve­hi­cles (NGVs) on the roads. The use of com­pressed nat­u­ral gas (CNG) for fleet/com­mer­cial ve­hi­cles and taxis is prov­ing to be par­tic­u­larly ef­fec­tive and in­creas­ingly popular i n de­vel­op­ing coun­tries: of the over 20 000 CNG dis­pens­ing sta­tions world­wide, 60% are in Brics coun­tries.

While CNG is a fos­sil fuel, it is a lower-car­bon al­ter­na­tive to petrol and can re­duce fuel costs by up to 40%, with a 20%-25% re­duc­tion in car­bon emis­sions.

In South Africa, the use of CNG is cur­rently be­ing trum­peted as a cost­ef­fec­tive and clean way to fuel the coun­try’s es­ti­mated 285 000 taxis.

Stephen Roth­man, man­ag­ing di­rec­tor of CNG Hold­ings, which sup­plies nat­u­ral gas to l arge i ndus­trial cus­tomers as well as the taxi in­dus­try, says that CNG rep­re­sents a “huge op­por­tu­nity” for the lo­cal en­ergy in­dus­try.

He notes that i n SA, a litre equiv­a­lent of CNG is sold at R9.99 – in­clud­ing VAT, as well as R1.26 for the re­cov­ery of the con­ver­sion kits.

“We’ve con­verted and funded 448 taxis so far,” he says. CNG Hold­ings has cre­ated a ded­i­cated fund for taxis, be­cause most own­ers and driv­ers can­not af­ford to fund the R19 000 con­ver­sion them­selves. To in­crease aware­ness and pro­mote the use of CNG, the company has been run­ning an in­cen­tive pro­gramme for driv­ers and own­ers, with cash re­wards for those who fill up most fre­quently.

“Our driv­ers are mak­ing good sav­ings,” says Roth­man. “Our top driver used over R18 000 worth of CNG in Oc­to­ber, and sav­ings can vary from R600 to R1 500 per week de­pend­ing on driver habits and routes.”

CNG Hold­ing’s sub­sidiary NGV Gas l aunched i ts f i rst flag­ship CNG filling sta­tion in Langlaagte, Jo­han­nes­burg i n March, and Roth­man says that a sec­ond filling sta­tion in Dob­sonville, Soweto will be opened in the com­ing weeks.

The in­te­grated gas company NOVO En­ergy has three NGV filling sta­tions, with a fourth in the pipe­line. An­dri Hugo, CEO of NOVO, says that the company cur­rently sup­plies around 200 taxis, and also has mi­crolend­ing and fi­nanc­ing plat­forms in place to en­cour­age adop­tion.

He ex­plains that the main bar­rier for the taxi in­dus­try is the con­ver­sion cost ( be­tween R1 8 000 and R20 000), but once driv­ers make the change, they “don’t want to go back”.

Com­mer­cial in­ter­est is also strong, ac­cord­ing to Hugo, with com­pa­nies l ook­ing to re­duce their car­bon foot­prints as well as re­duce costs.

Fleet op­er­a­tors and orig­i­nale­quip­ment man­u­fac­tur­ers such as Tata, Volk­swa­gen South Africa and Mercedes- Benz South Africa are

Taxi cabs in the Chi­nese city of Chengdu, Sichuan run on nat­u­ral gas that is stored in a cylin­der in the lug­gage

com­part­ment.

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