With the Cabinet expected today to approve a temporary waiver on the tax imposed on the installation of natural-gas-powered engines, Mercedes Benz, Toyota and General Motors will be the first carmakers in the country to roll out natural-gas vehicles (NGVs).

Deputy permanent secretary for Energy Pornchai Rujiprapha said his ministry originally planned to waive the excise tax - levied on installation costing not more than Bt50,000 per car - for two years starting from the approval date.

But the carmakers have proposed a three-year period to the Finance Ministry, which will be discussed by the Cabinet today.

"Once the Cabinet approves the tax waiver, the carmakers should be able to install the engines, have them tested and launch the vehicles in three to six months," he said.

Ong-at Phongkitvorasin, secretary-general of the Federation of Thai Industries car club, said while Mercedes was ready to manufacture NGVs at its Samut Prakan plant, Toyota and GM planned to install the engines outside of their factories. "They are ready to kick off this project once the excise tax waiver is approved, while other carmakers are thinking about it," said Ong-at. "There are many issues to consider: the investment, demand for NGVs in the next few years, PTT Plc's NGV-station expansion and the quality of the gas."

He said he personally would prefer that pickups, buses and lorries be converted into NGVs first, rather than passenger cars.

Ong-at's deputy, Narongchai Watanakasem, who is also a Toyota representative, said that in order to introduce NGVs, the production line needed thorough studying, particularly in regard to the worthiness of the investment.

"We must also look more closely at export opportunities. So in the initial period, we would do this outside the plant, so that we could test the market. Initially, our focus will be on vehicles popular with taxi companies, such as the Limo series," said Narongchai.

He admitted there appeared to be limited interest among passenger-car owners to convert from traditional fuels to natural gas, because they are reluctant to introduce changes that would cost a lot of money.

He said that despite the continued rise in the price of petrol, car owners would rather save money elsewhere than pay to convert their cars into NGVs.

The installation subsidy was finalised last Wednesday by caretaker Energy Minister Viset Choopiban and Deputy Finance Minister Varathep Ratanakorn, in the light of sky-rocketing oil prices that threaten to raise inflation and dampen economic growth.

The government believes encouraging the public to use more gas would help improve the situation.

There are currently fewer than 100,000 NGVs on the Kingdom's roads, because consumers remain unsure of the quality of the installation, which is provided by non-carmakers. It is believed that carmaker involvement will increase public confidence.

PTT is also in a position to be a big player in the NGV industry as the only provider of natural gas.

Nutthachat Charuchinda, executive vice president for PTT's natural-gas business, said that to promote natural-gas sales, the company had increased the marketing fee to Bt1.40 per kilogram, from 50 to 60 satang before.

Nutthachat also said Bangchak Petroleum Plc planned to start selling natural gas at three stations later this month. This network will be enlarged to 12 stations by the end of the month, he said.

"PTT is now negotiating with the operators of Petronas, Shell and Caltex stations for the provision of natural gas," he said.

Pornchai said the number of NGVs should reach 500,000 units within five years, due to government subsidising installation of natural-gas engine and to the cheap price of the gas itself, at Bt8.50 per kg, three times less than traditional fuels.

PTT also plans to expand its NGV-station network, from fewer than 100 now to 430 within three years. The number of stations will eventually reach 700.

"To encourage natural-gas consumption, PTT will also guarantee that the retail price of gas will be held at Bt8.50 per kg for another two years," said Nutthachat.

Watcharapong Thongrung

The Nation