THERE will only be a market for natural gas for vehicles (NGV) if there is a vast difference in its price to fuel, if the government implements a targeted fuel subsidy, Petrol Dealers Association of Malaysia president Khairul Annuar Abdul Aziz said.

With NGV no longer in demand over the last few years, Khairul said players are not anticipating much of a change to the current situation, if the government plans to rationalise all forms of fuel subsidies or opt to maintain the current blanket subsidy.  

“In the event the government resorts to either of this, the demand (for natural gas) will not be that high.  

“If the government decides to implement targeted subsidies but keep the natural gas price at the current rate, then the demand can potentially go up.  

“At the end of the day, it all depends on the price variation. As long as there is a big difference in fuel price, then the demand might go up,” Khairul told The Malaysian Insight. 

Khairul’s response comes after he was asked if the government’s targeted subsidy plans would see a surge in vehicles being fitted with the natural gas kits, making them NGV.  

Last month, International Trade and Industry Minister Mohamed Azmin Ali said that the government is planning a targeted fuel subsidy mechanism, adding that it was meant to benefit the lower-income group.

He said the move would be to cushion the country from the impact of rising crude oil prices.

“Those with BMWs cannot enjoy the same subsidies as those driving Kancils,” he was quoted as saying.  

With Petronas being the only natural gas supplier in Malaysia, Khairul said even the national oil corporation is at a loss selling it. 

“Natural gas itself is heavily subsidised. Petronas is selling it at a loss,” he said.  

In 2016, Abdul Rahman Dahlan, then minister in the Prime Minister Department, said the government subsidises up to RM200 million every year for NGV.  

He said Petronas was suffering a loss of RM100-200 million a year in giving out subsidies.  

NGV was introduced in 1998 in the Klang Valley. 

In 2020, it was reported that there were about 77,000 units of NGV in the country. 

The report revealed that about 103 NGV stations operated in 2016, down almost 40% from 178 in 2015. 

A check with Petronas revealed that there are 74 stations currently equipped with NGV pumps, with most of them in the Klang Valley.

Natural gas is currently priced at 68 sen per litre. – June 20, 2022.