Average Gasoline Price 2001

Car conversion business hits rough patch

The once booming business of converting cars into CNG-run vehicles is on the brink of ruin due to a gas-price hike that discourages car owners to turn to clean energy.

Industry people blamed the government's sudden U-turn on conversion that put all authorised conversion workshops at stake.

“A sharp rise in gas prices is responsible for the drastic fall in CNG conversion, as natural gas is no longer cheap anymore,” said Zakir Hossain Nayan, secretary general of Bangladesh CNG Filling Station and Conversion Workshop Association. “The conversion business is close to becoming a thing of the past.”

There are 180 CNG conversion workshops in Bangladesh, according to Rupantarita Prakritik Gas Company Ltd (RPGCL), the government body responsible for licensing CNG conversion shops. The number of CNG-driven vehicles in Bangladesh stands at 196,783, consuming 5 percent of the country's average 2,000 million of cubic feet of gas per day.

The scenario was different only a few years ago when car owners rushed to conversion workshops to change their vehicles into the CNG-mode due to the increasing petroleum prices and the government's back-up to adopt clean fuel.

Nayan said the business received the first major blow in 2008 when the gas prices doubled from Tk 8.5 to Tk 17 per cubic metre during the rule of the caretaker government, and the double cuts in petroleum prices. The latest jump to Tk 25 per cubic metre put the last nail in the coffin.

“Now we have almost no work. Since the price rise last month I have received no order although I have a huge set-up. Many workshops do not have orders at all,” he said. “Only a handful of workshops have some regular work. A huge investment is sitting idle.”

Industry people said they stepped into the business after the government opened the door for private conversion in 2001. They are now incurring financial losses.

Nayan used to convert 100 small cars and 20 trucks into CNG-run vehicles a month before the caretaker government moved on energy prices, but the number came down to eight in the month after the decision.

“Now I have no work although I have to spend Tk 1 lakh a month for about 12 workers. Although we do some servicing works, but that is not enough to keep the businesses running,” he said.

Faruk Talukder Sohel, managing director of Shohag CNG, a subsidiary of Shohag Group, said the CNG conversion business is on the verge of collapse.

His firm now converts 10-15 vehicles a month. “We had five conversion stations outside of the capital, but none of them is operational now. We have only a shop in Dhaka, which is running with lower activity.

Gas Prices Info - Carwasher.net

G asoline, one of the main products refined from crude oil, accounts for just about 16 percent of the energy consumed in the United States. The primary use for gasoline is in automobiles and light trucks. Gasoline also fuels boats, recreational vehicles, and various farm and other equipment. While gasoline is produced year-round, extra volumes are made in time for the summer driving season. Gasoline is delivered from oil refineries mainly through pipelines to a massive distribution chain serving 168,000 retail gasoline stations throughout the United States. The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners. In 2002, the price of crude oil averaged $24.09 per barrel, and crude oil accounted for about 43% of the cost of a gallon of regular grade gasoline (Figure 1). In comparison, the average price for crude oil in 2001 was $22.95 per barrel, and it composed 38% of the cost of a gallon of regular gasoline. The share of the retail price of regular grade gasoline that crude oil costs represent varies somewhat over time and among regions. Distribution, marketing and retail dealer costs and profits combined make up 13% of the cost of a gallon of gasoline. From the refinery, most gasoline is shipped first by pipeline to terminals near consuming areas, then loaded into trucks for delivery to individual stations. Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline for resale to the public. The price on the pump reflects both the retailer’s purchase cost for the product and the other costs of operating the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner. The State of California operates its own reformulated gasoline program with more stringent requirements than Federally-mandated clean gasolines. In addition to the higher cost of cleaner fuel, there is a combined State and local sales and use tax of 7.25 percent on top of an 18.4 cent-per-gallon federal excise tax and an 18.0 cent-per-gallon State excise tax. Refinery margins have also been higher due in large part to price volatility in the region.

Natural Gas Annual 2001

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