| I REFER to Mr David Tan's letter last Saturday, 'Why has price of CNG gone up?'.
We would like to point out several facts about using compressed natural gas (CNG).
Natural gas is priced based on fuel oil (FO). In the first half of the year, the price of FO has increased by around 35 per cent, but we have increased our fuel price by less than 17 per cent. For clarification, Smart Energy started selling CNG at $1.28 a kilo. These increases are beyond the control of Smart Energy as a retailer of CNG. FO prices were also reflected by SP Services in its electricity tariff revision.
CNG is sold in kilos, while petrol is sold in litres. For a better comparison, owners are encouraged to measure their cost of fuel in terms of dollars per kilometre travelled. Taking the example of a 2-litre Honda Accord on CNG, with a sampling of 7,286km travelled, total consumption was 517.75kg. This is about $0.106 per km (at $1.49 per kg). On 95 unleaded petrol (5 per cent discount at $2.124), it would cost about $0.212 per km.
Our cost of goods is also tied to charges imposed by the authorities. In coming months, there will be a higher charge for natural gas through the national pipe infrastructure. This will ultimately cost the consumer more.
While we work to keep CNG prices competitive, global market forces dictate the cost of supply. To remain a viable business, pump prices must reflect corresponding increases passed down from our vendor and the authorities.
William Aw
Managing Director
Smart Energy
|
