The further growth in demand for NGV equipment will encourage domestic car makers to build new production facilities

6 august 2018 | Rossiyskaya Gazeta

As gasoline and diesel fuel continue to rise in price both private car owners and major companies switch to compressed natural gas (CNG). The demand for natural gas tanks has already increased more than four-fold. As local manufacturers fail to meet the sky-rocketing demand, the new niche is flooded with imports from China, including counterfeits. Experts warn about the dangers of such products but they are convinced that domestic suppliers should soon be able to meet the rising demand. That's the opinion expressed in the monthly energy bulletin of the Analytical Center, in which the experts look back at the past five years of natural gas vehicles in Russia, writes Rossiyskaya Gazeta.

Oleg Kolobov
Oleg Kolobov
Department for Fuel and Energy Sector

The experts used the data of the Ministry of Energy to estimate that in 2013-2017 the sales of compressed natural gas increased almost by a factor of 1.5, reaching 600 million cubic meters, a figure that is somewhat lower than the targets of the state program (about 100 million cubic meters below target).

The number of natural gas vehicles is rising somewhat faster than the sales of methane. According to data of the Ministry of Internal Affairs, in 2015-2017 it increased by half as much again, reaching 212 thousand vehicles; it only represents 0.4% of the total number of vehicles in the country, though. "It should be noted that the official statistics may be very different from what is actually happening on the ground," the energy bulletin stresses. "Industry sources say the length and complexity of the process for getting the required registration for your vehicle after its re-equipment results in that only about 10-30 percent of car owners that get natural gas equipment installed on their vehicles bother to have them registered."

Car owners that want to save money on gas are switching to natural gas and the same applies to companies, believes Analytical Center expert Oleg Kolobov. The cost per kilometer of travel is two to three times less for natural gas vehicles. According to the analyst, it costs between RUB 60 thousand and RUB 100 thousand to have your car converted to natural gas, and given the difference in the price of fuel, converting a private car with an average mileage of 50 thousand km a year or a commercial vehicle with a mileage of 70 thousand kilometers per year will pay back within four to six months.

The soaring prices of gasoline and diesel fuel only boosted the trend last year: imports of CNG containers shot up to 29 thousand units per year, more than four times the imports seen in 2016. According to the data collected by Saint Petersburg State Unitary Company Passenger Motor Transport, the vast majority of the parts used in natural gas equipment such as gears, frames, fourth-type tanks are imported (when a new natural gas filling station is built, the reverse is true about 90% of the tech is domestically sourced). The first, second and third type tanks are no exception: the bulk comes from china, including counterfeit ones, the bulletin says. This is impeding the development of domestic manufacture and creating risks for consumer safety, the experts believe.

"Consumers may opt for counterfeit products both deliberately on account of their lower prices and without realizing it because of the lack of authorized service centers in the regions. In either case, choosing counterfeit equipment is dangerous because under ideal conditions, equipment must be selected and installed by certified centers depending on the technical characteristics of a specific vehicle and the purposes that it is intended to be used for," Mr. Kolobov said. The expert estimates that further growth in demand will encourage domestic manufacturers to set up new production facilities while foreign companies will be motivated to localize production in Russia.

Source: Rossiyskaya Gazeta

Photo: from open sources