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Roundup: Bangladeshi Motorists Rushing to Conversion Stations As Oil Price Soaring

Posted on: Friday, 9 September 2005, 09:00 CDT

Roundup: Bangladeshi motorists rushing to conversion stations as oil price soaring

DHAKA, Sept. 8 (Xinhua) -- Bangladeshi motorists are queuing in conversion stations as the government has for the third time raised petroleum prices in a bid to reduce its loss and cope with global rise of oil prices.

Bangladesh, though poor in petroleum products, has plenty of natural gas and experts said since the country has enough gas, it would not be badly hit by the overheated global market.

The government this week raised the price of fuel oil again, which turned out to be the fourth hike of this year.

The latest rise was 17 percent on average. The government said the present price rise also would not be able to stem the loss of the state-run Bangladesh Petroleum Corporation, the body handling import of petroleum products and the government raised the prices after bowing to pressures from the donors.

Mahmudur Rahman, adviser to the Energy Ministry admitted that there was a pressure from the donors for the hike.

Vehicle owners, particularly car owners, have started rushing to the Compressed Natural Gas (CNG) conversion stations in the city to convert their vehicles into CNG-run to lessen their financial loss.

The CNG conversion stations are facing extra pressures and work overtime to tackle the situation. They are also making brisk business from the conversion. To make good use of the opportunity, the conversion stations have increased the price of conversion.

Bangladesh, one of the poor nations of 140 million people, consumes 3.7 million metric tons of petroleum, which is entirely imported. The Bangladeshi government, hungry of hard currency, spends about 2 billion US dollars for importing the required fuel every year. Last year the government spent extra 7 million dollars for importing fuel, officials said.

"Fuel prices are now too high and we cannot afford it any more. So I have decided to convert my car into CNG-run," said Mezbahul Huq, a car owner in Mirpur residential district in the capital.

Due to the repeated rise in the petroleum prices, many private vehicle owners take CNG as a better option, as it benefits themselves and the government in saving the hard currencies.

"With the rise of fuel prices, the number of CNG-run vehicles will go up and it will save our hard-earned foreign currencies. From this point of view I don't think the price hike of petroleum products is a burden for us," said Shamim Ahmed, another car owner.

Officials at the CNG conversion stations said the rush is unmanageable for the time being. After this week's rise of petroleum prices by the government, the rush has increased manifold.

"Once we could convert a vehicle into CNG-run within three days after the customer approached us for conversion, now it takes at least a month to get a serial," said Mizanur Rahman, a service engineer of Navana, the largest private conversion station.

Many car owners, however, complained that the converting companies have raised charges of conversion by taking advantage of the huge rush of vehicles.

"The cost of CNG conversion has been raised three times this year. I converted one of my cars at 37,000 taka (about 560 US dollars) early this year. Now the companies are charging 42,000 taka (about 636 US dollars)," said Latifur Rahman, an owner of several vehicles.

The car owners seeking conversion said the government should allow setting up of more CNG conversion stations to cope with the situation. The conversion companies admitted the higher charges, saying it is not because of rush.

"The price rise of steel and other accessories forced us to demand higher charges," Mizanur Rahman said.

The owners of filling stations in the capital are a bit concerned about the future of their trade because they believe it will be difficult for an individual to run his vehicles with petroleum products at a high cost.

"We are a bit worried about the future of our long time business. If the prices of oil continued to soar in the world market, one day we will have stop our filling station because all vehicle owners will opt for gas-run," said Abdul Matin, an official in a filling station.

"Our sale has already started to go down with latest rise of prices of petroleum products. We are fearing further fall with the passage of time because conversion of vehicles is taking some time, " Matin said.

The number of motorized vehicles in Dhaka is around 600,000, of which 30 percent are gas run.

Most bus operators in the country are now importing gas-run vehicles, which also help to reduce air pollution of Dhaka city.

To offset the severe pressure on the economy, the government has declared two-day weekly holidays instead of one day. The government has also decided to keep 17 percent government vehicles off road and converting all petroleum-based power plants into gas- fired ones within the next five years.

Source: Xinhua News Agency - CEIS

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