Govt may give incentives to promote gas use for cars

The government is currently exploring the possibility of giving incentives to encourage car owners to use gas for their vehicles, a minister said on Wednesday.

National Development Planning Minister Armida S. Alisjahbana said that the government was committed to promoting natural gas usage in the country to deal with the energy shortage problem, particularly in the industrial and transportation sectors.

“We’re currently focusing on boosting natural gas usage for public and private transportation vehicles. Gas is cheaper and also cleaner than oil-based fuels,” she said on the sidelines of the 2011 Indogas Conference and Exhibition at the Jakarta Convention Center.

She explained that promoting gas usage for transportation vehicles, particularly the private ones, in the country would require expensive investments since it meant new infrastructure such as more gas stations needed to be installed.

“Moreover, every car owner would have to buy a converter to allow them to use the gas-based fuels,” she said.

Bappenas was currently calculating the funds required to go ahead with the planned incentives, Armida reported. The planned incentives would function as a stimulus for car owners to convert their fuel consumptions, she added.

“We’re going to learn from India’s experience. We’ll also discuss with some private companies to gather more input,” she said.

Last week, oil and gas director general at the Energy and Mineral Resources Ministry, Evita Herawati Legowo, suggested that private car owners use liquefied gas for vehicles (LGV), or Vi-gas, as a cheaper alternative after the government removed the fuel subsidy for private cars.

The government has launched a regulation to restrict private cars from buying subsidized fuels starting in April of this year in Greater Jakarta. Under the new regulation, only public transportation vehicles, motorcycles and fishermen can purchase the subsidized fuels.

“If private car owners don’t want to use Pertamax [one of non-subsidized fuels], they can use LGV whose price is cheaper than Premium [one of the subsidized fuels] as an alternative,” Evita said in a press statement.

She reported that public transportation vehicles like taxis and buses had started to use LGV because the price was only Rp 3,600 (around 40 US cents) per liter. Currently, 19 fuel stations in the Greater Jakarta area sold the gas-based fuel.

However, she acknowledged that converting fuel usage might be a bit costly for car owners, since the price of a converter could reach Rp 10 million, but she ensured that buying a converter would be much cheaper than continuously consuming Pertamax.

Upstream oil and gas regulator BPMigas has announced that the agency will ramp up the domestic gas supply from the last year’s level of 1,203.18 million standard cubic feet per day (mmscfd) to 1,690.43 mmscfd in 2011, as stipulated in the 2011 natural gas supply contract.