7/09/2008

Is switching to CNG a trap?

Petrol prices shot up and converting to CNG becomes an attractive option. Now the converts are crying foul. After spending so much money to convert their petrol cars to CNG, they are now at the mercy of the CNG suppliers. With only two points, maybe more later, it is a MONOPOLY! CNG price has shot up by 25% in 3 months from $1.28 per kg to $1.59. And prices of CNG were not affected like the speculation in oil. Producer price of CNG was stable during the whole duration. Someone sleeping to allow such profiteering to go on under the clear blue sky. Wake up, wake up. Oh never mind. It is ok to sleep until master says 'Fetch', then start running.

10 comments:

skndr said...

There's always an option across the causeway.

redbean said...

hi skndr, welcome to the blog.

across the causeway could have been a good option. but we don't meddle with market mechanism. only 3/4 tank rule.

now with malaysia changing the subsidy rules, no more an option.

Anonymous said...

When it is no longer a monopoly, it will become a cartel, like OPEC. Whichever way you look at it, it is the consumers who end up being suckered. In a cartel, it is just a question of asking the brotherhood to produce less to keep prices high.

redbean said...

after spending a few thousand bucks on the conversation, money spent upfront, before one starts to save a few dollars, the price of CNG may get so close to petrol that it negates everything.

how come never think of it?

Mockingbird said...

CNG is also a finite resource like petrol. If demand for it continues to grow, so will its price.

redbean said...

at the moment, the demand is insignificant to justify price hike. production cost is constant and supply is abundant. but supply can be artificially restricted.

Mockingbird said...

And since there are only a handful of CNG suppliers currently, they can dictate how much to charge for it since there is hardly any competition.

redbean said...

these motorists who spent so much money converting their cars to cng may be in for a rude awakening. they can tear off the gadgets without paying another hefty sum when the differential or savings is negligible.

Anonymous said...

Government's alternative for the car users from using petrol to CNG is like "jump out of the frying pan into the fire".

redbean said...

i don't think the cng is a govt initiative. think it is a private venture. and the conversion of petrol cars to cng cars is also private.

with so limited alternatives, can be at their mercy.