Government would finance conversion to CNG of almost 70,000 cars

Last year, following the Russian invasion of Ukraine and the post-pandemic crisis, world prices for petroleum fuels reached record levels. The crude West Texas Intermediate (WTI), which serves as a reference for Peru, even exceeded US$120 per barrel. This context influenced the local price of diesel, LPG, gasoholes and gasoline, which largely depend on imported oil. For example, between 2019 and September 2022, gasohol 90 increased by about 57% and automotive LPG increased by 48% in Metropolitan Lima.

However, vehicular natural gas (NGV), which is produced 100% in Peru from Block 88 and has a ceiling price established in the license agreement, registered a variation of only 7%. It was placed around S/5 per gallon in the capital, according to Osinergmin.

In line with this result, in 2022 the demand for NGV accelerated and reached 768,703 cubic meters, 27.31% higher than the volume sold in 2021. In addition, it exceeded the volume registered in 2019 by 1.58%. , before the pandemic, when 756,717 m³ were sold. 91.3% of sales were made in Lima, according to Infogas.

GNV: migration record

The number of CNG vehicles it also achieved record levels last year. In total, 74,505 units were activated, of which 73,601 correspond to converted vehicles. This number is almost triple the units that adopted this fuel in 2019 and 2021, when 22,083 and 20,442 CNG vehicles were accumulated, respectively.

Since 2005, the year in which the NGV commercialization in the country, close to 400,000 vehicles have migrated to this fuel. In this same period, the use of CNG has allowed Peruvians to save more than S/20.6 million, of which S/3.1 million correspond to 2022.

On the other hand, given the high demand for CNG conversions, the workshops for this purpose have also progressed and went from 175 in 2019 to 228 in 2022. The opposite occurs with the service stations that sell CNG, whose growth has been stagnant in recent years, reaching 346 last year, just 13 new installations more than in 2019.

Executive Goals

Since 2018, the Government has promoted the massification of natural gas through the “NGV saving program” and “Camisea GNV bonus”. Thus, reinforced by these initiatives, the Ministry of Energy and Mines (Minem) foresees during this year subsidize the switch to CNG of almost 70,000 vehicles (69,800 units) nationwide, This is also thanks to the supplementary credit approved by Congress.

In detail, the conversion of 59,800 light vehicles and 90 heavy vehicles will be financed by the GNV Savings Program with a budget of S/198.3 million. The remaining 10,000 vehicles will be beneficiaries of the supplementary credit and will demand S/41.68 million. The regions included in the initiatives are: Lima, Callao, Junín, Ica, Cusco, Piura, La Libertad, Áncash, Lambayeque, Cajamarca, Arequipa, Moquegua and Tacna.

As part of this policy, Minem allocated S/200 million in February to finance a discount of S/2,000 for the conversion to CNG of vehicles that use LPG.

Towards zero imports

Although the conversation of almost 70,000 CNG vehicles is a good start, the Executive’s goal should be to achieve zero fuel imports in the coming years, says Erick García, former general director of Hydrocarbons.

According to the specialist, Aiming at this objective will allow us to become a country with energy self-sufficiency, which in turn will eliminate dependence on international prices.

The Government must also encourage the use of LNG (liquefied natural gas) and promote greater promotion of NGV, underlines García.

13,700 conversions were exceeded

In the first quarter of this year, more than 13,700 vehicles were converted to CNG nationwide.

Most conversions were made in Lima and Callao (11,699 units). Ica followed with 628 vehicles, La Libertad (170) and Piura (202). Finally, Junín, Lambayeque, Áncash and Cusco, which together added 699 units.