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Fuel price hikes drive consumers to switch to gas instead of gasoline - Daily News Egypt

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Fuel price hikes drive consumers to switch to gas instead of gasoline

The switch will save EGP 500 per month at an average use of 10 litres of gasoline 80

Natural gas has become more attractive to car owners, following the cabinet’s decision to increase the price of gasoline and diesel.

Gas-switching stations and service centres have been seeing an increase on demand to switch fuel to gas instead of gasoline, as it is the cheapest option now.

This flow was supported by the spread of gas supply stations in various governorates and the ease of installing the necessary conversion kits in the specialised centres.

The average consumer will save about EGP 500 per month at an average consumption of 10 litres per day of gasoline 80. This rate jumps to EGP 900 per month compared to using gasoline 92. Thus, the cost of the conversion is recovered after 7-10 months of using gas at the average consumption.

A source at Gastec said that the Ministry of Petroleum is striving to ease the burden on citizens through opening new gas fuel station and conversion centres, as gas is considered a safe and economic alternative.

The source pointed out that there is a strong demand for the conversion of cars to natural gas in the wake of the decision to increase fuel prices, especially passenger cars, adding that the centres are keen on using the latest technologies in conversion of cars that fit with the latest model to provide best performance.

He stressed that the gas companies of the Ministry of Petroleum have a good infrastructure, able to absorb the current increase, and any future increase in the number of cars converted without the need to add any new investments.

Regarding the rumours that spread on social media on the cost of operating cars with gasoline 95 instead of 92 as their prices came closer, Raafat Masrouga, the honourary chairperson of the Automotive Marketing Information Council (AMIC) said that the high price of fuel has not and will not impact to the sales of cars, noting that the market is in a phase of anticipation this month, but most likely will not see prices change.

He told Daily News Egypt that gasoline 95 has become economically better for new cars that use gasoline 92, noting that the higher models in 2012 when using gasoline 95 for 100,000 km, will save 15% of cost of operation, which includes fuel and maintenance.

Moreover, he said that using gasoline 95 on more popular models will maintain the performance of cars and reduce maintenance cycle.

He predicted that the demand on converting to gas will grow even higher.

Hussein Mostafa, the executive director of the Egyptian Automobile Manufacturers Association (EAMA), said that the decision of fuel price hiking will have only limited impact on sales, especially on the economic and popular cars, while the luxury car sales will suffer no change.

As for the prices of gasoline 92 and 95, he explained that only a small portion of gasoline 92 users will use gasoline 95, considering its impact on cars performance; yet, many consumers will not be able to bear the cost of using gasoline 95.

Other sources told Daily News Egypt that the increase in the price of gasoline 95 is very little compared to the increase in prices of gasoline 92 and 80. They explained that gasoline 95 is not almost unsubsidised, while gasoline 92 was subsidised by 50% before the increase and now dropped to only 25%.

The sources said that the big gap between the prices of gasoline 95 and gasoline 92 had driven many consumers to use the subsidised gasoline 92 before the last increase. Consequently, the result is increased subsidies and increased burdens on the state budget, but with the recent price spikes and the low difference between the price of gasoline 95 and gasoline 92, some consumers will prefer to use the latter.

The sources confirmed that the sales of the car market were not affected by the high fuel prices and with the previous increase in fuel prices, there was no change in sales of companies, but the impact of car sales from the rise in the price of the cars.

Topics: Fuel gasoline Prices

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