Petrol going up, gas prices still falling . . . CNG vehicles on the way?

Many British motorists are deeply unhappy about paying £1.30 per litre now for petrol and whatever they say, our politicians aren’t going to do anything about it. So what will be the market response?

The background to this post’s theme is that the supply of natural gas keeps increasing and the price is gently falling at a typically high demand part of the year. The decoupling of oil from gas prices, thought impossible a few years ago, has already happened in the USA and is starting to kick off here. And be under no illusion, the consequences are huge.

As gas emerges to become like oil, a globally fungible commodity, sold at the same price all over the world, new uses for natural gas are going to be found. Starting with high growth in Compressed Natural Gas (CNG) vehicles.  I don’t have the latest figures but it seems there were 7.8m CNG vehicles worldwide early in 2008 and 11.2m by the end of 2009. That’s what I call rapid growth. And Pakistan with 2.3m, Argentina with 1.8m and Iran with 1.6m vehicles are the unexpected leading adapters of this technology.

For the cash-strapped British motorist, there’s still some way to go though before we seem CNG refuelling stations like the one above and a flourishing cottage industry of CNG conversion garages. Not least in convincing policymakers that installing electric charging points for short-range electric vehicles all over the country with public money is going to be a lot more expensive.

At the end of last week, the US price per million british thermal units of natural gas was $4.22 whereas the equivalent price in Britain was $8.49.