Analyses
18 mar 19

Natural Gas cars, An option in Latin America

One way to deal with high petrol and diesel prices is to use alternative energies that are cheaper and more environmentally friendly.
The price of oil is on the rise again, increasing 18% so far this year to US$59 a barrel, and some experts are estimating the price to reach US$67 or so by the end of the year.
Although considering a fleet made up of hybrids or full electric vehicles (EV) is an option, some vehicle owners in Latin America are opting to convert their cars to natural gas vehicles (NGV) due to the lower initial investment. Among the countries considering this alternative is Mexico.

 

Besides the increasing price of oil, the Mexico City metropolitan region has been facing a gasoline shortage crisis which has drastically increased prices as well. Impacted by fuel theft in the region, the price of fuel at some stations jumped by some 50% earlier this year.


Petrol station in Mexico City closes down due to lack of fuel supply (source: Shutterstock)
 

Although Mexico's institute of statistics and geography INEGI shows that more than 30,000 hybrids and EVs were sold in the country from 2016-2018, the price of these vehicles is still a bit high and return on investments are only seen for those putting in considerable amounts of driving (e.g. 5,000km per month). 

As for NGV, the country's association of natural gas vehicles (AMGNV) has estimated that more than 15,000 cars have been converted to NGV.
Besides a fairly low cost to convert your car to NGV, another benefit to using this energy is that it takes about the same time to recharge an NGV as it takes to fill up a tank with gasoline or diesel. EV charging takes quite a bit longer. 

Finally, we cannot go without mentioning that NGV is cleaner for the air, a focus of many large cities in Latin America such as Mexico City, Santiago, Bogota, Lima, Buenos Aires, and São Paulo.
However, the one issue hindering the purchase or conversion of more vehicles to NGV is the lack of public charging infrastructure.
For instance, compared to the 11,000 petrol stations or so in Mexico in 2018, there are 528 EV stations and only 60 NGV stations, according to the international energy association. 


SUMMARY


Determining whether or not to use NGV in your fleet really depends.
The cost to convert a standard car to NGV is somewhere in the range of US$1,300 so calculate the number of kilometers driven with the savings acquired from the lower price of natural gas. For a taxi driver, this could pays off within four months.

Other things to keep in mind is that you will lose some of your cargo space and possibly some of the guarantees on your car (e.g. shock absorbers).
 

So, get the calculator out and do your homework, and find the best option for you!

 

5 largest vehicle markets
in Latin America

Petrol price per liter
(March, 2019)

Brazil

$1.08 

Mexico

$1.02 

Argentina

$1.06 

Colombia

$0.74 

Chile

$1.18 

Authored by: Daniel Bland
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