The race is on for alternative fuels in South Africa, with the two strongest contenders, the EVs (Electric Vehicles) and the NGV’s (Natural Gas Vehicles) being the track favourites. Worldwide, 7.2 million EVs share the road with over 27 million NGV’s in a pool of approximately 1.4 billion vehicles. There is still a bit of distance to go until the finish line, but who will win the alternative fuel race? Will it be the top contenders; NGV’s or EVs that become the sole replacement for fossil fuels?
Statistically speaking it does not seem likely that petrol or diesel will be succeeded by a single alternative fuel. Countries such as India, Brazil and China have built future energy policies based on dual fuel scenarios specifically focused on NGV’s and EVs. South Africa’s energy policies are not that clear but seemingly like that of Asia and the Americas.
In the not-so-distant future, local fleet owners will have access to 3-5 fuel options, dependent on the purpose of the fleet. In a world of choice, why do large-scale fleet owners prefer NGV’s?
Pricing & Finance
Unlike petrol and diesel, Compressed Natural Gas (CNG) pricing is not determined by The National Energy Regulator (NERSA). The selling price is determined by the retailer. CNG Holdings, the largest retailer nationally in the vehicle space has only had 3 price adjustments in the last 5 years, two adjustments down and one adjustment up. This consistency helps corporates budget effectively and alleviates the shock of the monthly fuel hike. The R 9.17 per litre also makes corporates on CNG a lot more competitive than their petrol and diesel competitors.
Unlike petrol and diesel, CNG does have VAT applied to the price. Fleet owners can claim this and make further savings. The current inland price for 95 Octane Petrol is R 18.30 and the retail price of CNG is R 10.50 a saving at the pump of R 7.80 per litre. Corporates can save an additional R 1.37 per litre by claiming the VAT. This results in a massive total saving of R 9.17 per litre for corporates who make the change to Natural Gas.
Finance companies are willing to finance the conversion of vehicles and to rent the kit to corporates for just a few hundred Rand a month. This makes running on CNG possible for all vehicle owners, personal, SME’s, transport companies and corporates with large fleets.
In a global environment where carbon reduction is a key focus for sustainability, CNG reduces carbon emissions dramatically in both petrol and diesel engines and while this is good for the environment it is also good for the vehicle owner in two very important ways:
Reduced carbon build-up means longer periods between services with increased life for spark plugs and engine oil. This reduction in maintenance costs will dramatically affect the budget of any vehicle owner, small or large.
SARS offers a tax deduction for using CNG rather than petrol or diesel. The 12L tax code is used by vehicle owners to pay towards the conversion further increasing the savings made by CNG users.
The advent of NGV’s stems from the late 1800s and with over 100 years of technological advances NGV’s have become a strong candidate for alternatively fuelled fleets. Low fuel costs, improved engine reliability and longevity positions Natural Gas-powered vehicles as a front runner in the alternative fuel race.
Fleet owners would make the NGV choice based on saving money, keep vehicles running longer and reducing fuel theft. Further to this, CNG is a product in abundance with current reserves life spanning over 50 years.
Infrastructure and Availability
NGV’s have been in production since the 1930s and the support infrastructure supersedes the demands. In China, there are over 1.5 million NGV’s with over 2000 fuelling stations. Similar South Africa has established infrastructure and can offer large-scale fleet owners onsite, mobile, or public fuelling points. Internationally sourced, CNG is easily transportable and converting a vehicle can be done within the week. In addition, vehicle manufacturers like NISSAN, IVECO, ISUZU, DAF, SCANIA, HYUNDAI, South Africa now offer OEM approved NGV’s.
In essence fleet owners now have more choices on which vehicles can be converted or purchased as NGV’s.
Future Supply Secured
CNG Holdings is a local supplier of CNG for both fleet and industrial use. Established in 2013, NGV Gas a division of CNG Holdings has successfully supplied CNG to fleets throughout Gauteng. This supply has included Metrobus’s, Taxi’s and law enforcement vehicles. Securing the future through product accessibility is the core mandate for NGV Gas and with over 18 years of experience in supply, large-scale fleet owners can rest assured of CNG availability.
The energy race is heating up. The government’s recent announcement of draft legislation around private energy procurement has opened South Africa up to many different renewable energy options. Specifically, to vehicles, large-scale fleet owners need to choose a fuel partner that not only saves companies up to R9 a litre but is tried and