HCM City bus operators may face CNG supply cuts

Bus operators in HCMC that use compressed natural gas (CNG) for their vehicles may face an undersupply as a CNG supplier has announced plans to reduce its current supply by 20%-30% for the rest of 2019.

HCM City bus operators may face CNG supply cuts
Passengers get on a bus running on CNG in HCMC. Bus operators in the city may face a shortage in CNG supply

Accordingly, the city’s plan to invest in buses that use CNG in place of diesel fuel to encourage the growth of public means of transport and protect the environment may be disrupted, Sai Gon Giai Phong newspaper reported.

Petro Vietnam Southern Gas JSC (PV Gas South) issued an announcement on the upcoming supply cuts in late May. The supplier will notify HCMC two hours prior to the cuts so the city can adjust its bus operation plan.

Aside from the supply cut, PV Gas South’s Dong Nai branch earlier told bus operators in the city that it will suspend the gas supply if they do not sign new contracts with higher prices. The operators had no choice but to comply since PV Gas South is the only CNG supplier.

The HCMC Management Center of Public Transport (MCPT), under the municipal Department of Transport, said that the supply cuts will likely disrupt the operations of public buses and lose the trust of investors who had planned to switch to using CNG-powered buses.

The city’s transport department had petitioned the PetroVietnam Gas Corporation to direct its subsidiary, PV Gas South, not to suspend the CNG supply during the rest of 2019 and to propose the Vietnam Gas and Oil Group approve using a certain amount of CNG for buses in the city at prices equivalent to those used for power generation.

According to the city’s plan for the 2018-2020 period, it has to purchase over 3,000 new buses, where 75% will use natural gas. Data from MCPT shows that the city is home to more than 2,400 passengers buses, including some 42 CNG-powered ones.

Since the switch to using CNG-powered buses was introduced, many bus operators in the city have expressed concern over the monopoly held by PV Gas South over the gas supply. To reassure them, the municipal transport department at the time had pledged to work with the gas supplier to ensure an adequate CNG supply.

 

According to transport experts, the transport department needs to work with the supplier to address the issue as soon as possible. The city should seek more suppliers to avoid complete dependence on PV Gas South.

The bus operators had supported the switch and accepted making higher investments in CNG-powered buses. Accordingly, the city has to work out effective solutions to remove obstacles to the operations of transport service providers, said the experts.

In response, MCPT said that aside from PV Gas South, PVGazprom NGV also wanted to supply the gas, but its supply will only be available from next year. In addition, the management center and the current supplier have jointly upgraded and moved CNG filling stations to more appropriate locations.

Further, to ensure a stable gas supply to serve CNG-powered buses, subsidized by the State budget, the municipal government has asked the Ministry of Industry and Trade and the Vietnam Oil and Gas Group to set aside some 36 million cubic meters of CNG for this year and some 40 million cubic meters in 2020 for the city’s public modes of transport. SGT

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