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Transport sector cites difficulty in shifting to costly clean fuel
MANILA, Philippines - The high cost of engine conversion is discouraging the transportation sector from shifting to cheaper alternative fuel. The sector is banking instead on state support to wean it away from diesel prices that have risen weekly by P0.50 since end-February, except last weekend. In separate telephone interviews, transport leaders told BusinessWorld the cheaper options are compressed natural gas (CNG) and liquefied petroleum gas (LPG). LPG is commonly used by taxicab operators in Metro Manila, while CNG has been introduced in buses plying South Luzon Expressway. But they noted that LPG conversion kits range between P60,000 and P70,000, while converting the bus into CNG-fed would chalk up between P1.5 million to P1.8 million, which is equivalent to buying a brand new bus. "Based on the rising trend of oil prices, it is all the more important to convert to CNG. It is the best solution for us because it is 30% cheaper than diesel," Philippine Bus Operators Association President Homero A. Mercado said. CNG is retailed at P14.52/liter compared with the average diesel price in Metro Manila of between P38 and P40.50. Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide spokesman George F. San Mateo said jeepney operators may not be able to afford the engine conversion. Zenaida Maranan, Federation of Jeepney Operators and Drivers Association of the Philippines president, said they are interested in tapping the P1-billion revolving fund offered by Malacañang that will allow the transport sector to switch to cheaper and environment-friendly fuel like CNG and LPG. Land Transportation Franchising and Regulatory Board Chairman Thompson C. Lantion said the program will be offered through the Development Bank of the Philippines. "If they need conversion kits, it will be given to them through a loan facility. Though not much, this should help [the transport sector]," Mr. Lantion said. The cost of conversion should be offset by 30% to 50% savings from not using diesel. Mr. Lantion said the fund will be released within the next two months pending the issuance of final rules for its implementation. In last Friday’s closing, the benchmark Dubai crude jumped to $105.45 per barrel from $95.35 per barrel in March. Pump prices have risen seven times since end-February by a total of P3.50. There was no price adjustment at the weekend but oil companies have cautioned that there will be no break from higher fuel prices. - Marian Grace S. Ramos, BusinessWorld
Tags: energy
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