As petrol prices rise, more Egyptians convert to duel-fuel vehicles

The number ofEgyptiansswitching toduel-fuelvehiclesis accelerating as the government pushes motorists to use cheaper, cleaner and plentiful natural gas.

About 300,000vehicles, mostly taxis and minibuses, have beenconverted toduel-fuelsystems since the 1990s,a small fraction of the 11 millionvehicleslicensed in the country.

But authorities are encouragingmoredrivers to switch by subsidising vehicle conversions, keeping compressed natural gas (CNG)priceslow, and building CNGfuelling stations and conversion plants.

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Nearly 32,000vehicleswereconverted during the financial year from July 2018 to June 2019, twopetroleum ministry officials said. The target for this financial year is 50,000vehicles. That compares with just 6,000 conversions in 2015/16.

Officials say the number of private carsconverting is rising. They hope this will soften the blow ofpetrolprice hikes after recent subsidy removals, as well as reducing pollution and cutting the import bill for liquidfuels.

Egyptianshave seen steep increases tofuelpricessince 2014, with most energypricesbrought up to international levels under a three-year, IMF-backed reform plan completed this year.

But gas has remained cheap compared with liquidfuels.

One cubic metre of CNG costs 3.5 Egyptian pounds, roughly the equivalent of one litre of diesel at 6.75 pounds or one litre of 80-octanepetrolat 6.5 pounds.

"The ministry ofpetroleum has maintained an appropriate price so that natural gas always stays at 50 per centof the 80-octanepetrol(price), which encouraged drivers to turn to conversion," said Abdelfattah Moustafa Farahat, head of Egyptian International Gas Technology GASTEC.

Private cars now make up 30 per centof conversions, Farahat said.

Officials say a boom in natural gas production and exploration since the discovery of the giant offshore Zohr gas field in 2015 spurred them to act. Egypt became self-sufficient in natural gas in late 2018.

"The discovery of Zohr field and achieving self-sufficiency in natural gas have encouraged the state to think: why don't we use this gas as a domesticfueland work to expand its use," said ‭‭‭‭Ayman Shalaby, assistant vice chairman at the Egyptian Natural Gas Holding Company (EGAS).

GASTEC is one of two state-run companies, along with the Natural GasVehiclesCompany (Car Gas), that dominate the sector. Private and foreign companies have also entered the market in the past few years.

GASTEC plans to set up 54 newduel-fuelstations with CNG over the next three years, in partnership with Italy's Eni, as well as buildingmorefuelling stations for public buses, Farahat said. Currently, Egypt has 187 CNGfuelling stations and 72 conversion centres.

The government also has a plan for minibuses, a common form of cheap transport across Egypt. Under the scheme, 142,000 minibuses would beconverted and another 88,000 old diesel minibuses replaced with biofuelequivalents over the next three years, whilemorethan 350fuelling stations would be built.

Motorists gave theduel-fuelsystem mixed reviews. Some praised cost savings onfuel but complained of reduced power or luggage space.

Officials say conversions are preceded by technical checks and the cylinder size and shape can be adapted to the vehicle.

The government is subsidising and providing low-interest instalment plans for conversion systems, which cost 5,000-7,500 pounds, as well as encouraging assembly plants and importers to providevehicleswith built-in systems.