Demand for installation of CNG kits grows with gasoline inflation

Demand for installation of CNG kits grows with gasoline inflation
Demand for installation of CNG kits grows with gasoline inflation

The demand for vehicular natural gas (CNG) increased this year, driven by the high gasoline price. Petroleum-derived fuel has already undergone six readjustments in the first three months of 2021, and accumulates a 54% increase in refineries. Meanwhile, in this quarter, the market recorded a 15% growth in the national volume of CNG kit installations in automobiles, and 11% in the State of Rio. The data are from the Oil, Gas and Naval Management of the Federation of Industries of Rio de Janeiro. (Firjan).

The search for natural gas is related to the competitive price of this fuel, which is historically more economical than gasoline and even ethanol. According to Firjan, in Brazil, for each real spent on CNG, the driver rotates twice as much compared to the other two fuels. In Rio, this ratio is 2.5 times.

In addition to yielding more, the price of pumps is also lower. In the municipality of Rio, for example, while ordinary gasoline costs an average of R $ 6, according to the National Petroleum Agency (ANP), CNG has an average price of R $ 2.99. The difference is more than 50%.

The investment in a CNG kit for the car, however, is not low. And it has gotten even higher with the increase in the prices of steel cylinders, impacted by the pandemic and the rise in the dollar. The sector estimates that the kit has been on average 40% more expensive this year alone.

– But it is still worth it, because if you add the discount that the driver receives on the IPVA and the fuel savings, the reduction in expenses is very big – guarantees Celso Mattos, vice president of Firjan and president of Sindirepa.

Paulo Aguiar, mechanical engineer and professor at Ibmec / RJ, recommends that consumers do the math before installing the CNG-kit thinking only of the high price of gasoline. Considering that the equipment costs from R $ 4 thousand to R $ 6 thousand, the driver must evaluate how long he would have a return that would compensate for this expense.

– The savings at the pump exist and are immediate, but we need to do a more thorough account. For those who change their car frequently, they may not have time to pay for the investment.

Discount on IPVA

Some states offer discounts on Motor Vehicle Property Tax (IPVA) for drivers who have a CNG-powered car. This is the case in Rio de Janeiro, where instead of paying the conventional rate of 4% for passenger cars, the taxpayer from Rio de Janeiro with a vehicle powered by natural gas pays 1.5%.

That is, in practice, for a passenger car that has a venal value of R $ 50 thousand, the conventional IPVA is 4%, which corresponds to R $ 2 thousand. With the discount for CNG, the value would come to R $ 750 – a savings of R $ 1,250.

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It is worth remembering that, in Rio, automobiles with more than 15 years of manufacture do not pay tax. For the others, if the kit is installed in the first year after purchase, the discount will only come in the following year, charged in January.

More expensive cylinders halt growth

The Union of the Industry of Repair of Vehicles and Accessories of Rio (Sindirepa) argues that the growth of the CNG market could be even greater if it were not for the increase of the prices of the cylinders, that are also lacking in the suppliers. The reasons are the pandemic, which has increased the demand for oxygen cylinders in hospitals, and the price of steel, which, like oil, is a commodity and, therefore, is subject to exchange rate variations.

– There is a cylinder manufacturer in São Paulo, which holds 85% of the national market. The other 15% are served by two smaller manufacturers and imported ones. In the importers, who help to balance the market, the freight price has tripled, so they are not able to bring it – explains Celso Mattos, president of Sindirepa.

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For Fabiano Reis, a partner at the Rota GNV converter, the issue of inputs has been the biggest bottleneck in the sector.

– Steel will rise by around 15% in April, and most components of the CNG kit use this raw material.

Pros and cons of gas

For mechanical engineer Paulo Aguiar, there are advantages and disadvantages of installing the CNG kit on the vehicle. Among the benefits, the Ibmec / RJ professor highlights the economy when filling and the fact that it is a clean fuel, which is positive from an ecological point of view, but also helps to maintain some parts of the car.

– As it is a cleaner fuel, it makes the combustion chamber less dirty, making nozzles, candles and injectors last longer. As it does not carry water, this also prevents corrosion in the exhaust system.

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On the other hand, Aguiar highlights the importance of always maintaining the vehicle up to date, since CNG can generate some problems.

– Spark plug wires are usually a problem. In addition, it increases the internal pressure in the combustion and can cause problems in the engine. But that usually happens with more casual people – he says.

Another point to note is the car warranty, which in some cases is canceled when the owner installs the CNG kit.

Regarding the loss of power, the professor explains that this problem occurred in the older versions, but it was minimized from the fifth generation of kits.

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