Rio de Janeiro – With a fleet of almost 1.6 million natural gas (VNG) powered vehicles, Brazil is in the third place in the global ranking in the sector, losing only to Pakistan, where there are over 2 million vehicles and Argentina, with 1.71 million. According to the president of the Latin American Association of Vehicle Natural Gas, Rosalino Fernandes, despite the international crisis, the national fleet of VNG vehicles grew 8% last year.
"In a certain manner, the crisis may even help the sector, said Fernandes, who considers the 8% growth excellent, as the growth of the Gross Domestic Product of Brazil (GDP) in 2008 should be between 5% to 6%. However, the growth of consumption of VNG was below the 14% average of previous years.
Fernandes, who coordinates the VNG Committee at the Brazilian Oil, Natural Gas and Biofuels Institute (IBP), attributed the decrease to the high price of natural gas, in comparison with other fuels. He said that in some cases, there was growth of up to 20% in the price of gas. And many consumers in potential balked because they considered that the price could rise even further, he pointed out.
According to him, the international crisis is causing a reduction in the industrial consumption of goods, mainly of ironworks products and household appliances. The reduction of sales contributed to the reduction of gas demand by heavy industry and the electric generation industry. Consequently, there is greater offer of the product, and the tendency is for prices to fall, favouring consumers.
Also contributing to the reduction was the fact that the price of gas is based on the price of oil and is in dollars. As the price of the barrel of oil has dropped from US$ 140, last year to around US$ 47, Fernandes believes that this helped reduce the price of gas. However, the price of gas has not fallen at the same rate as that of oil.
Apart from that, in February, with the lowering of natural gas prices, between 10% and 11%, the product may become more competitive. Fernandes hopes that, with this, potential consumers who did not start using gas last year may do so now, seeing the price "return to more common levels". According to him, the price of natural gas is going to drop both for VNG and for residential and industrial use.
Among the states, Rio de Janeiro is the one that counts on the greatest number of VNG powered vehicles, which answers to 47% of the total fleet, followed by São Paulo, with around 20%. With the fluctuation in the price of gas, Fernandes estimates that this year the sector should grow between 10% and 12%. To him, there is still much space for growth of the VNG market in the country, as the current fleet corresponds to less than 10% of the national light vehicle fleet, which is 28 million vehicles.
*Translated by Mark Ament
