Price and Tax Incentives in Brazil’s Paraná Encourage CNG Conversion

| Brazil, Rio de Janeiro

Brazil CNG conversion installationWith rise in cost of liquid fuels in Brazil’s southern state of Paraná, compressed natural gas (CNG) has gained even more prominence according to the NGV Committee of the Brazilian Association of Piped Gas Distribution Companies (ABEGÁS). The refinery price for gasoline has risen 3% and ethanol 5%, thereby increasing the advantage for drivers of natural gas vehicles (NGVs).

According to the survey of prices of the National Agency of Petroleum (1), Natural Gas and Biofuels (ANP), the mean value of a liter of petrol for the consumer from Paraná is BRL 2.916 (USD 1.13). Ethanol costs BRL 1.982 (USD 0.77). The average price of CNG in Paraná, according to ANP, is R$ 1,923/m³ (USD 0.75).

With the current average prices and the expected yield (13 km per cubic meter of natural gas, 10 km per liter of petrol and 7 miles per gallon of ethanol), driving one hundred kilometers on CNG costs approximately BRL 14.80 (USD 5.75), while the cost for gasoline is approximately USD 11.65 and ethanol is USD 10.99. The savings amount to 50% for those supplies.

This time of year, homeowners can utilize their “13th salary” (Christmas bonus) to convert vehicles to CNG and save even more in 2015, by qualifying for discounted motor vehicle tax. For cars running on natural gas the cost of the tax is 1% on the value of the vehicle compared to 2.5% for vehicles powered by gasoline and / or alcohol.

A CNG conversion kit costs between USD 1,160 and 1,550, and for a vehicle owner driving around 4.000 km per month time of return of the investment is, on average, 5 months.

Compagas, the utility responsible for distribution of natural gas in Paraná, currently has 37 CNG gas stations in the cities of Curitiba, Campo Largo, Colombo, Paranaguá, Pinhais, Ponta Grossa and São José dos Pinhais, and there is one filling station  in Londrina selling gas supplied by Gaslocal. There are over 30 thousand vehicles that already use natural gas in the state and 18 workshops accredited by INMETRO to perform vehicle conversions to CNG.

(Source: ABEGÁS)

(1) Research at ANP for the period 02-08 Nov 2014)

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